Neocloud stocks fall after Musk warns of sector shakeout

Shares in 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. Musk stated that debt markets have nearly shut off funding for companies lacking substantial revenue independent of AI data centers, predicting massive consolidation. CoreWeave fell about 5%, Iren dropped 3%, and Nebius declined over 2%, adding to recent selloffs driven by investor concerns over high debt levels and data center costs. The warnings follow broader industry stress, including rising credit spreads on CoreWeave's debt and Gartner research suggesting 80% of neocloud providers may cease independent operations by 2030. Analysts remain divided, with some viewing CoreWeave and Nebius as better positioned to survive the expected shakeout.