Rothschild & Co. Redburn, an independent research firm under Rothschild, initiated coverage on CoreWeave and Nebius on Monday, assigning "Sell" ratings to both. The firm believes that new cloud enterprises face "cyclically inflated" earnings and valuations, and that hyperscale cloud providers have higher actual economic leverage, which may limit their ability to fund the next phase of large-scale AI infrastructure development.
Meanwhile, Michael Burry, known as "The Big Short," estimates that leading tech giants such as Amazon, Meta, Alphabet, Microsoft, and Oracle collectively hold over $3 trillion in off-balance-sheet commitments, including uncommenced lease and purchase commitments. This has prompted scrutiny of the sustainability of their expansion capabilities. Burry is concerned that long-term leases and purchase expenditures are locked in, while the economic value of equipment, technological requirements, and future demand changes may occur more rapidly, leading to a structural mismatch between capital recovery and hardware updates for these companies.
Rothschild-affiliated institutions issue "sell" ratings on AI new cloud duo CoreWeave and Nebius; "Big Short" Burry warns tech giants may have over $3 trillion in off-balance-sheet commitments
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