CRWV, NBIS Stocks Get ‘Sell’ Ratings, AI-Pivoting Bitcoin Miners Get ‘Neutral’ Calls: Rothschild Says Credit Market Is ‘Sending The More Important Signal’

• Rothschild initiated CRWV and NBIS at ‘Sell’ and CORZ, WULF, APLD, CIFR, HUT and IREN at ‘Neutral’.
• The firm says credit markets are beginning to price risks that AI equities largely ignore.
• Rothschild stated hyperscalers have more economic leverage once off-balance-sheet commitments are included, potentially limiting future AI infrastructure spending.

Rothschild & Co. Redburn on Monday presented a more cautious stance on neoclouds Nebius (NBIS) and CoreWeave (CRWV) than Bitcoin (BTC) miners pivoting into AI infrastructure, citing that credit markets are pricing risks that AI stocks largely ignore.

In a note to investors cited by TheFly, Rothschild initiated coverage of CoreWeave and Nebius with ‘Sell’ ratings and also started coverage of Core Scientific (CORZ), TeraWulf (WULF), Applied Digital (APLD), Cipher Mining (CIFR), Hut 8 (HUT) and IREN (IREN) with ‘Neutral’ ratings.

Rothschild said the equity narrative around generative AI infrastructure "remains firmly bullish," but added that "credit markets are beginning to price risks that equities largely ignore."

Neocloud NBIS stock gained as much as 1.1% in pre-market trade amid the broader market rally, with retail sentiment on Stocktwits trending in the ‘bullish’ zone over the past day. CRWV stock gained around 1.8%, with sentiment around trending in ‘bullish’ territory over the past day. 

Credit Markets Send A Different AI Signal

Rothschild believes the credit market is "sending the more important signal" because the true economic leverage of hyperscalers is higher once off-balance-sheet commitments are included.

According to the firm, that could limit their ability to keep funding the next phase of the massive AI infrastructure buildout.

The warning is particularly relevant for companies that have moved from Bitcoin mining into AI and high-performance computing. CORZ, WULF, CIFR, HUT and IREN have all been developing data-center businesses alongside or beyond their crypto-mining operations, seeking to monetize power and data-center capacity through AI demand.

Among the cohort, HUT stock led gains, as much as 6% in pre-market trade, followed by CIFR stock, which was up as much 4%. On Stocktwits, retail sentiment around HUT continued to trend in ‘bearish’ territory over the past day, while sentiment around CIFR trended in ‘bullish’ territory. 

Meanwhile, IREN stock rose 3% in pre-market trade, WULF stock gained 2.5% and CORZ stock gained around 2%. Retail sentiment around IREN and WULF dipped to ‘bearish’ from ‘neutral’ territory over the past day, while sentiment around CORZ moved in the opposite direction. 

CRWV, NBIS Stocks Face ‘Sell’ Ratings

Rothschild said Nvidia (NVDA)-backed Nebius carries the greatest downside risk, stating that the stock is pricing in the most optimistic outcome from the ongoing repricing of compute economics.

According to the firm, CoreWeave has less downside risk than Nebius but its risk-reward "remains sufficiently unattractive" to warrant a ‘Sell’ rating.

Companies with direct exposure to the neocloud model face greater valuation concerns, while traditional real estate investment trusts could benefit indirectly from continued data center construction. Rothschild said traditional REITs "stand out as underappreciated second-derivative beneficiaries" of the AI buildout.

Bitcoin’s price was rallying in early morning trade, nearly crossing $85,000 before trending lower. The apex cryptocurrency rose as much as 5.5% in the last 24 hours, and was trading at around $84,800 at the time of writing. BTC was the top trending ticker on Stocktwits, with retail sentiment improving to ‘neutral’ from ‘bearish’ territory over the past day. 

Read also: Oil, Treasury Yields, Bitcoin: 3 Market Signals To Watch This Week

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