Neocloud stocks fall after Musk warns of bankruptcies among 200 firms

Shares of neocloud companies CoreWeave, Nebius, and Iren fell in premarket trading Monday after Elon Musk warned that over 200 firms in the sector could face bankruptcies and consolidation as financing access tightens. Iren dropped about 3%, CoreWeave lost roughly 5%, and Nebius fell more than 2%. Musk said debt markets have "almost completely closed off access to money" for companies lacking significant revenue beyond AI data centers, predicting a "guppy-like extinction and consolidation" for the 200+ neoclouds. The losses add to a sharp selloff in AI infrastructure stocks as investors reassess data center costs and debt financing for expansion. Analysts remain divided on the sector's outlook. Some see CoreWeave and Nebius as well-positioned to survive consolidation, while others have cut price targets amid concerns about AI returns and financing needs.