Shares of AI infrastructure providers CoreWeave, Nebius and IREN recovered in overnight trading late Sunday, following a turbulent week for the sector.
CoreWeave (CRWV) gained 2.6%, Nebius (NBIS) rose 3.8% and IREN advanced 3.3%.
The rebound came after a broad selloff driven by doubts over business models, rising financing costs and an inflation reading that exceeded expectations.
Survival Pressure Across the Neocloud Sector
CoreWeave shares had dropped more than 20% from Monday through Wednesday before recovering 6% on Thursday, after support from Nvidia CEO Jensen Huang.
The earlier decline reflected weakness across the wider neocloud sector, including Nebius and IREN.
According to The Information, industry executives expect only seven to 10 neocloud companies to remain viable among hundreds of operators.
Nvidia is reportedly helping companies in the sector through easier credit terms, assistance with site selection and $20 billion in leases.
The pressure extends beyond publicly traded providers, with investor concerns also affecting private companies seeking major funding through public markets.
Bloomberg reported Sunday that Nscale faces resistance from investors over its proposed $30 billion initial public offering valuation.
Citing people familiar with the matter, the report said a group of investors recently suggested a valuation between $16 billion and $19 billion would be more likely to attract buyers.
The valuation concerns emerged after Microsoft, one of Nscale's largest customers, withdrew from a UK data center deal following delays linked to power constraints at the site.
Credit market concerns have also added to investor anxiety surrounding CoreWeave.
Bloomberg reported last Wednesday that the company's unsecured bonds due in 2032 fell below 80 cents on the dollar, a level widely regarded as a warning sign of financial strain.
Separately, research firm Gartner projected that 80% of neocloud operators would fail to survive by 2030.
Technology investor Chamath Palihapitiya, founder of Social Capital, drew attention to CoreWeave's rising bond yields in a post on X late Tuesday.
Tesla and SpaceX CEO Elon Musk responded with a brief expression of concern: "yikes."
Despite the broader uncertainty, investor sentiment toward CoreWeave, Nebius and IREN had shifted to extremely bullish by Sunday, according to the source report.
