Neocloud stocks suffered a severe sell-off on Thursday, with IREN plunging 9% to $34.83 on heavy volume of over 40 million shares. The drop adds to a 41% decline over the past month, leaving the stock 52% below its yearly high. CoreWeave tumbled to $72 from a peak of $186, wiping out more than half its market cap. Nebius Group also cratered from $298 to $170.
The rout was triggered by mounting concerns that Meta Platforms is preparing to enter the commercial cloud infrastructure space, threatening the already crowded AI data center market. Investors are also anxious about a multi-billion dollar funding gap for IREN's AI pivot and an $800 million restricted stock grant to co-CEOs, which sparked dilution fears.
Wall Street analysts remain broadly bullish on IREN, with a Moderate Buy consensus and an average price target of $82.36 — more than double the current price. Freedom Capital upgraded the stock to Strong Buy, while Cantor Fitzgerald set a $99 target. However, JPMorgan rates it Underweight with a $46 target. Retail traders have been buying the dip, and institutional holder Invesco increased its stake by 45.9% in Q2.
Debt levels are also under scrutiny: CoreWeave holds $7.5 billion in short-term debt and $17.3 billion in long-term debt, Nebius's long-term debt surged to $8.4 billion, and IREN's liabilities surpassed $3.6 billion. Short interest remains elevated across the sector — 21.27% for IREN, 18% for CoreWeave, and 27% for Nebius — reflecting bets on further downside.
