Key takeaways
- Nebius and CoreWeave stocks rally on AI demand
- CoreWeave interest costs reach $846 million quarterly
- Nebius faces earnings test amid multibillion-dollar financing commitments
Nebius and CoreWeave shares rallied sharply on Wednesday, November 11, as stronger AI infrastructure earnings revived investor confidence in a sector increasingly dependent on borrowed money.
CoreWeave surged roughly 24%, while Nebius gained approximately 16% ahead of its November 12 earnings release. The recovery followed weeks of pressure on AI cloud providers, with investors questioning whether growing revenue can offset rising debt, interest expenses and construction costs.
CoreWeave Revenue Surges 168% as Interest Costs Nearly Triple
According to its third-quarter earnings release, CoreWeave generated $3.66 billion in revenue, up 168% year over year, while its revenue backlog climbed to $132.5 billion.
The results strengthened confidence in future demand, supporting a sharp CoreWeave stock rebound.
However, the company's quarterly net loss widened to $709 million from $110 million a year earlier.
Net interest expense reached $846 million, compared with $310 million in the corresponding 2025 quarter. CoreWeave's debt totaled approximately $46.9 billion at September's end.
Management expects another $1.05 billion to $1.15 billion in fourth-quarter interest expense while forecasting $37 billion to $39 billion in full-year capital expenditures.
The company is increasingly turning to customer-backed financing, including approximately $9 billion in expected customer prepayments and deposits over the next three months.
Nebius Faces Its Own Multibillion-Dollar Financing Test
Nebius enters its quarterly earnings announcement with a smaller revenue base but similarly aggressive expansion plans.
The Amsterdam-based AI cloud provider generated $582.3 million in second-quarter revenue, a 454% year-over-year increase. Analysts expect third-quarter sales of approximately $907 million, representing growth exceeding 500%.
Its rapid expansion has been supported by large contracts with Microsoft, Meta and other enterprise customers, alongside a Palantir infrastructure partnership.
Yet building capacity requires substantial upfront funding.
Nebius previously raised $5.75 billion through convertible senior notes and secured a $3.5 billion financing facility with Citi in October.
The company's earlier convertible debt announcement triggered a sharp stock decline, reflecting concerns about borrowing and potential shareholder dilution.
Analysts estimate Nebius could report approximately $146 million in third-quarter interest expenses, compared with CoreWeave's actual $846 million. However, the businesses differ considerably in scale, financing structure and revenue recognition.
Can AI Demand Offset the Cost of Expansion?
The financial challenge extends beyond either company.
CoreWeave expects more than 1.85 gigawatts of active power by year-end, while Nebius previously targeted 5 gigawatts of contracted power. These metrics describe different capacity stages and should not be treated as equivalent.
The distinction becomes especially important as potential data center restrictions threaten construction schedules and financing assumptions.
Investors are also questioning whether future AI revenue will arrive quickly enough to justify the industry's enormous upfront expenditure.
That broader AI financing challenge becomes more serious when customers delay deployments or borrowing costs increase.
