Parkev Tatevosian, CFA on $CRWV (Oct 27, 2026)

Shares of emerging cloud computing companies such as Coreweave and Nebius are declining as a result of growing investor concerns about their balance sheets and the sector's long-term unit economics.

So, investors are asking me what's going on with these companies , and in fact, which one I consider a better buy, Nebius or Coreweave?

What most excited investors about Coreweave and Nebius was the tremendous revenue growth, or rather, the tremendous growth that is expected to continue in the future.

Looking at the past 12 months, Coreweave generated $7.6 billion in revenue, up from about $1.5 billion in 2025. In fact, if we look at the estimates of Wall Street analysts who follow Coreweave and Nebius Group, they expect this strong revenue growth to continue.

Coreweave is projected to generate $13 billion in revenue in 2026, with that figure expected to triple or quadruple to $43 billion by fiscal year 2028.

But this is where investors' concerns begin. Certainly , demand exceeds supply, and this is likely to remain the case for 2027 and 2028 . But what will happen in the years 2029, 2030, 2031 and 2032 ?

Will the sector experience an oversupply? Will there be an oversupply, especially given that the costs of building these products and data centers are estimated at trillions of dollars between now and 2029? This is where concerns begin to escalate.

The risks are compounded because these companies are borrowing heavily to support their investments in building these data centers . It needs to build these data centers if it wants to achieve the revenue growth that it is projected to achieve.

They have a growing order book from customers worth billions of dollars, but they do not have the capacity to meet this demand unless they build more data centers. Thus, they secure a greater supply of that computing power to rent to their clients.

Indeed, their balance sheets began to become increasingly constrained.

Specifically, Coreweave borrowed fifty-one billion dollars, meaning it has more than 51 billion dollars on its balance sheet.

Therefore, it is also important to consider how much cash and short- term investments they have in the budget to see how long they can continue without going back to investors and asking for more money.

The answer is not much compared to their spending plans.

Meanwhile, Coreweave has just over $6.4 billion in cash and short- term investments. Coreweave shares are trading at a fraction of the price of the Nebius Group when measured by the price-to- forward ratio.

The Nebius Group is trading at a forward price of 3.5, while Coreweave is trading at a forward price of 1.1, likely because Coreweave's balance sheet is under greater pressure than the Nebius Group's.

We have seen that Coreweave has more debt and less cash, and this is currently the biggest concern for investors, so this is likely to be a major factor in the valuation difference between Coreweave and the Nebius Group.

After calculation, I see an upside potential of approximately 52% for Coreweave, with a fair value estimate of $83.50, while the current market price is $55.

Therefore, with regard to the evaluation of discounted cash flow, the two are very similar. Both are very similarly undervalued at current market prices . However, when measured using a market multiples basis and a price-to- forward ratio, Coreweave appears to be significantly undervalued , at a fraction of the valuation of the Nebius Group.

To answer the question of which I consider the better purchase at current market prices, the two are very similar. It's not an easy decision. Both are rated by me as a buying opportunity.

On October 28, or actually on October 23, I upgraded Nepais Group's stock to " buy" as well, and I had rated Korwef as a " buy" several weeks ago.

Therefore, making this decision is difficult, and it is a close assessment. But if I had to choose today, I would choose Koroyev. I would like to remind everyone that these stocks should only be considered by investors with a high tolerance for risk, as they are among the riskiest investments you can buy.