Neocloud and AI infrastructure stocks sold off sharply on Tuesday, with CoreWeave (CRWV) sliding 12.1% to $93.17, TeraWulf (WULF) falling to $15.62, and Nebius (NBIS) dropping to $241 from its monthly high near $280. The declines came as rising long-term U.S. Treasury yields, geopolitical tensions in the Middle East, and intensifying fears of an AI spending bubble prompted investors to rotate away from capital-intensive technology names.
CoreWeave was under additional pressure after heavy insider selling and concerns about its debt load. CEO Michael Intrator sold 200,000 shares at $89.18 on August 11, a 9.63% reduction in his stake, while insiders have offloaded more than 9 million units worth roughly $895 million over the past three months. The company’s debt-to-equity ratio of 5.53 is among the highest in its peer group, making it especially sensitive to rising borrowing costs. Trading volume reached nearly 37 million shares, about 28% above the daily average.
Despite the selloff, fundamentals remained strong across the sector. CoreWeave reported quarterly revenue of $2.58 billion, up 112.5% year over year, and beat loss estimates by $0.38 per share. TeraWulf posted second-quarter revenue of $71 million, compared with $47 million a year earlier, though the company cited the Bitcoin price retreat and its continued pivot toward AI data centers as factors. Its AI business is supported by a 20-year deal with Anthropic worth nearly $19 billion, potentially extending to $33 billion. Nebius said quarterly revenue jumped 454% to $582 million. Analysts nevertheless point to rising GPU, memory, server, and optical equipment costs as a major challenge, with companies likely needing substantial debt and equity raises to fund expansion.
Broader market signals added to the caution. The 30-year Treasury yield reached its highest level in more than two decades, and the European Central Bank warned that an AI-driven market correction was possible. Investor Michael Burry, known for predicting the global financial crisis, has reportedly shorted some top AI names, including Nebius. Short interest in TeraWulf, Nebius, and CoreWeave stands at 23%, 25%, and 13%, respectively. Still, some analysts argue AI bubble fears are overblown, citing strong revenue growth at Anthropic and OpenAI.
Analyst targets for CoreWeave remain generally bullish: Wells Fargo raised its target to $160, Truist to $155, and Mizuho to $115, while Raymond James downgraded the stock to “Hold” in July. The consensus price target among 36 analysts is $138.72, about 49% above Tuesday’s close.
