Bank of America revamps price targets on CoreWeave, Nebius stocks | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Despite the bearish noise, Bank of America just doubled down on the AI infrastructure trade, resetting its targets on neocloud giants, CoreWeave (CRWV) and Nebius Group (NBIS), with healthy upside from current prices.

The bank reiterated a Buy rating on CoreWeave, slapping a lofty $100 price target (about 22% upside), and initiated coverage of Nebius at $150 (roughly 30% upside).

Though both stocks have taken hits of late, BofA analysts still view the relentless AI buildout as far from fully priced in.

BofA’s core thesis is that both businesses are in the thick of things in the supply-constrained AI infrastructure market.

CoreWeave is perhaps the more seasoned operator of the two and has already converted backlog into tangible sales, while Nebius is positioned as a more architectural platform player.

Moreover, despite the volatility in the AI space, both companies are set to deliver on their lofty goals over the next couple of years.

CoreWeave is expected to grow sales by 144% in 2026 and 86% in 2027, while aggressively pursuing more capacity.

On the flipside, Nebius is targeting 1GW of near-term capacity, aiming to take that pipeline past 3GW, backed by triple-digit revenue expansion off a much smaller base.

Valuation tells the story.

CoreWeave is currently priced more like a mature growth play, while Nebius still trades at a discount as it continues to scale.

However, scaling up will require a ton of capital, and that won’t exactly be cheap.

Even so, BofA sees both businesses as critical beneficiaries of the AI buildout, provided they can continue to execute flawlessly.

Bank of America updated its outlook on CoreWeave and Nebius, highlighting their roles in the AI infrastructure buildout

Photo by Bloomberg on Getty Images

AI infrastructure boom is creating a massive new cloud market

The tremendous rise of neocloud giants like CoreWeave and Nebius hasn’t happened in a vacuum.

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At the core, it is a structural shift in how cloud infrastructure is consumed.

What we’re seeing of late is the splitting of the general-purpose computing market into a couple of distinct lanes in traditional cloud and AI-optimized infrastructure. The latter is arguably growing a lot faster.

In fact, BofA analysts cite Gartner estimates that show that Nebius alone is targeting a whopping $270 billion opportunity today, covering both segments.

Moreover, their total addressable market continues to expand rapidly.

General-purpose IaaS: $233.3 billion to $340.1 billion by 2028
AI-optimized IaaS: $36.2 billion to $79.2 billion by 2028
Total market: $270 billion to $419 billion by 2028
Implied growth: roughly 26% CAGR through 2028

That ramp-up is driven by the unrelenting, specialized demands of AI workloads, which require everything from high-density GPUs to low-latency networking and massive energy capacity.

That’s where neoclouds have carved out a role.

Hyperscalers already have their hands full balancing legacy workloads with AI demand, while companies such as CoreWeave and Nebius are focused specifically on AI-first use cases.

If that dynamic continues to play out, it would usher in an entirely new layer of the digital economy.

CoreWeave stock returns vs the S&P 500

Over 1W, CoreWeave returned -1.64% versus -1.84% for the S&P 500.
Over 1M, CoreWeave returned 11.54% versus -4.32% for the S&P 500.
Over 6M, CoreWeave returned 1.05% versus -0.68% for the S&P 500.
On a YTD basis, CoreWeave returned 36.69% versus -3.69% for the S&P 500. Source: Seeking Alpha.

Nebius stock returns vs the S&P 500

Over 1W, Nebius returned 6.42% versus -1.84% for the S&P 500.
Over 1M, Nebius returned -11.99% versus -4.32% for the S&P 500.
Over 6M, Nebius returned -34.49% versus -0.68% for the S&P 500.
On a YTD basis, Nebius returned 22.04% versus -3.69% for the S&P 500. Source: Seeking Alpha.

Nebius investment case rests on platform, scale, and positioning

Massive and fast-growing market tailwind: Nebius is eyeing a combined $270 billion cloud total addressable market, and its management foresees the market skyrocketing to $400 billion to $500 billion by 2030.
Differentiated global GPU architecture: Nebius’ big edge is its ability to link GPUs across a myriad of regions into a single compute fabric, helping overcome energy and capacity bottlenecks. So if we continue seeing local capacity constraints for the foreseeable future, Nebius will most certainly be a critical beneficiary of that trend.
Strong contracted demand and hyperscaler ties: The company has disclosed more than $45 billion in contracted sales, which includes multiyear deals with Microsoft and Meta, offering a ton of visibility into future expansion as it scales aggressively.
Platform expansion and monetization upside: The focus going forward centers around AI Cloud and Token Factory offerings. So Nebius will be looking to target full-stack AI deployment to unlock higher-margin revenue streams as it gets deeper into the cycle.

CoreWeave investment case hinges on demand, speed, and AI-first infrastructure

Explosive top-line growth with strong visibility: BofA forecasts CoreWeave sales rising 144% in 2026 and another 86% in 2027, backed by an eye-popping contracted backlog ($66.8 billion as per the latest report) and growing partnerships with AI bellwethers like OpenAI and Meta.
Purpose-built for AI workloads: CoreWeave is able to deploy AI workloads more quickly and efficiently due to the robustness of its software stack, orchestration tools, and ‘physical design’.
Premium positioning in a scarce market: BofA believes CoreWeave deserves a premium multiple as AI infrastructure remains supply-constrained, and its alignment with the fastest-growing segment of cloud-related spending.
Customer mix is broadening: Microsoft accounted for the lion’s share of past revenues, but BofA sees its backlog concentration improving as CoreWeave continues adding more big-ticket AI customers.

Financing risks could become the biggest test for both neoclouds

CoreWeave and Nebius operate in some of the hottest areas of the AI space, but neither company’s bull case is flawless.

For CoreWeave in particular, the financing burden is remarkably heavy.

BofA models nearly $32.5 billion in capex in 2026, followed by $25 billion to $31 billion annually in 2027 and 2028, along with a debt load of around $69 billion by 2028. In fact, net interest expense alone could surge to nearly $4.6 billion.

Clearly, CoreWeave has its work cut out on the customer deployment side, while continuing to secure structured financing to keep things afloat.

Nebius faces that same conundrum, as BofA estimates the businesses will need nearly $29 billion of external financing through 2028, with capex jumping from $4.1 billion in 2025 to $18 billion in 2026 and $20 billion annually after that.

Debt, including lease liabilities, will rise to a worrying $24.1 billion in 2027.

So even with its moat and tremendous contracted demand, it still has a long way to go before posting sustainable profits. Consequently, revenue numbers will need to continue firing, for funding needs to become digestible.

Another major issue for both neocloud players is the risk, which is much harder to model.

The biggest names in cloud computing, including Amazon, Microsoft, Google, and Oracle, are also building their own capacity to address the supply gap.

The discussion could shift to topics such as GPU availability, deployment speeds, cost-effectiveness, and related factors, so both neocloud players can continue outperforming.

There’s also the risk that today’s AI infrastructure boom becomes more competitive on pricing, weighing down margins in the process.