To The Moon

Neoclouds Stumble: Inside the Slide in Oracle, CoreWeave, and Nebius

Over the past few days, several Neoclouds names have clearly underperformed the broader market. Each company has its own specific drivers, but there's also a noticeable spillover effect from sentiment within the same segment.

Oracle

Oracle initially rallied after last Thursday's analyst day, then reversed hard—down about 7% on Friday and another 4.8% yesterday.

Oracle raised its FY2030 OCI revenue target to $166B (+~15% vs. Sep-9's $144B), said AI server “leasing” runs 30–40% gross margin over the contract life (countering The Information's ~14% in-period), and set FY2030 company targets of $225B revenue (5-yr CAGR ~31%) and $21 EPS (CAGR ~28%).

The problem for the stock, however, is

~Nearer-term profit elasticity and the long bridge between today and those FY2030 numbers. Investors are focused on utilization ramp timing and the reality that data-center buildouts and GPU installations front-load costs, which can make near-term margins look less “fat” than the long-term model suggests.

~Pulled-forward valuation. The market may have already pulled forward quite a bit: at roughly $280 per share, Oracle is trading at about 13x its FY2030 EPS target of $21. If we assume a 20x–25x multiple in 2030, that implies a $420–$525 share price—roughly 50%–90% upside over four years. That may be perfectly acceptable to large long-only funds, but for hedge funds or retail investors looking for quicker payoffs, it can feel underwhelming.

Coreweave

CoreWeave's weakness likely ties back to its proposed all-stock acquisition of Core Scientific, announced in July. The deal has met rising opposition from shareholders and proxy advisors (including ISS), who argue the offer undervalues Core Scientific and comes with terms seen as unfriendly to target shareholders.

CEO Michael Intrator has since said CoreWeave will not raise its roughly $9 billion all-stock bid, calling Core Scientific “nice to have, not a need to have.” He also emphasized the company will press ahead even if the transaction is voted down.

With Core Scientific's shareholder vote scheduled for October 30, the outcome is poised to be a meaningful catalyst for CRWV's stock in either direction. If the deal ultimately falls through, CoreWeave would likely be forced to shoulder higher costs or source power elsewhere at prevailing market rates—neither outcome is favorable—and, overall, it would slow CRWV's pace of expansion.

Nebius

Nebius's decline appears more about sympathy moves with Oracle and CoreWeave and about sentiment around an upcoming unlock related to its recent financing.

On September 9, the company announced a $17.4 billion contract with Microsoft and the stock surged after hours; it then raised capital in two parts: a primary equity offering of up to 12,432,432 new shares at $92.50 (about $1.1 billion of proceeds) and two convertible notes due 2030 and 2032 totaling roughly $3.16 billion. The equity piece implies limited dilution, and any post-unlock liquidity overhang should be manageable, but in the near term it still adds to the caution that's now blanketing the entire "Neoclouds" cohort.

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