CoreWeave (CRWV) and Nebius Group (NBIS) are trending higher in Monday’s premarket trading, with the stock , but Rothschild Redburn analyst Alex Haissl sees different risks in the two stocks. He initiated coverage of CoreWeave with a Sell rating and $54 price target, implying 34% downside, while starting coverage of IREN with a Neutral rating and $40 target, indicating about 14% downside from current levels.
Haissl’s concerns for CoreWeave center on “unit economics and ability to execute pipeline conversion.” For IREN, he believes those risks are already “well priced in.” Let’s take a closer look at his views on the two stocks.
CoreWeave: GPU Pricing and Financing Remain Risks
CoreWeave’s main risk is whether its AI infrastructure business can generate strong returns. Haissl is concerned about “unit economics and ability to execute pipeline conversion.” In other words, CoreWeave needs to turn its growing GPU capacity into profitable customer contracts.
At the same time, Haissl sees several factors that could improve those economics. Strong GPU pricing would help CoreWeave earn more from its capacity. A more diverse customer base could also improve returns. Better deal structures could lower its financing costs.
However, the analyst also sees risks on the other side. Hyperscalers and leading AI labs could bring more computing capacity in-house, reducing demand for CoreWeave’s services. A sharp drop in GPU pricing would also hurt its economics. Higher financing costs could put further pressure on the business.
IREN: AI Expansion Creates New Growth Opportunities
IREN started as a Bitcoin (BTC-USD) mining company, building data centers powered by renewable energy. As Bitcoin mining became more volatile, the company began shifting its data-center capacity toward AI computing. It now runs both an AI cloud business and a Bitcoin mining operation.
Haissl sees “unit economics and pipeline conversion risks” as already reflected in IREN’s valuation. He is focused on whether IREN can convert its data-center pipeline into actual business while maintaining attractive economics.
Haissl sees upside if IREN signs additional large-scale tenants. Better-than-expected execution at its existing data-center sites could also support his view.
CRWV or IREN: Which Neocloud Stock Does Wall Street Prefer?
According to TipRanks Comparison tool, Wall Street has a Moderate Buy consensus rating on both stocks. CoreWeave’s average price target of $140 implies 72% upside, while IREN’s average target of $76 implies 63% upside from current levels.
