• Dan Ives says the sharp declines in CoreWeave (CRWV) ($CRWV), IREN (IREN) ($IREN) and Nebius (NBIS) ($NBIS) represent buying opportunities rather than warning signs.
  • Despite rising borrowing costs, Ives argues AI computing demand remains strong, with chip demand reportedly exceeding available supply by 13 to 1.
  • He expects 800–1,000 data centers to be built in the coming years.

A Bullish Call Amid a Brutal Selloff

Dan Ives, the ever-optimistic tech analyst, is urging investors to buy the dip in AI infrastructure stocks, calling the recent selloff "way overdone." His message came after a brutal October 14 session that saw CoreWeave ($CRWV) plummet approximately 15.5%, IREN ($IREN) drop 12.2%, and Nebius ($NBIS) fall 10.1%. All three weakened further in overnight trading, though those moves are not yet regular-session closing prices.

Ives, known for his bullish stance on technology, argues that the market is conflating two separate issues: demand for AI computing and the cost of financing it. "Higher interest rates make AI infrastructure more expensive to finance, but do not necessarily weaken demand," he said, according to people familiar with his thinking. He expects upcoming earnings from the largest cloud companies—the hyperscalers—to reinforce the AI-spending outlook. In a notable vote of confidence, ARK Investment Management reportedly bought $14.7 million of CoreWeave shares during the decline.

Ives also pointed to a supply-demand imbalance that he believes underscores the opportunity. In an August interview, he estimated that chip demand exceeds supply by 13 to 14 times. While that figure is his own estimate—not an independently established industry statistic—it reflects the fervor driving AI infrastructure spending. He further forecast that 800 to 1,000 data centers will be built in the coming years, though the geography and timeframe of that projection could not be independently verified.

The Credit Market's Skepticism

Beneath the bullishness, however, credit markets are flashing warning signs. CoreWeave's bonds maturing in 2032 have reportedly approached a 15% yield, a level that signals deep concern about the company's leverage. As of June 30, CoreWeave's debt and lease obligations totaled approximately $52 billion. Analysts cited worries that long-lived data-center lease commitments may outlast shorter customer contracts, creating renewal and pricing risk even with a substantial revenue backlog.

CoreWeave's Q2 2026 results illustrate the tension. Revenue surged 112% year over year to $2.575 billion, and its revenue backlog reached approximately $104 billion at June 30. Yet the net loss widened to $626 million from $290 million a year earlier, while net interest expense ballooned to $640 million from $267 million. Capital expenditures were roughly $6.42 billion, and free cash flow was negative $5.74 billion—a stark reminder that rapid growth has not eliminated the need for external funding.

CEO Mike Intrator defended the business model in an internal memo, reportedly describing the market's reaction as "irrational." The company did not respond to a request for comment.

Neoclouds Under Pressure

CoreWeave, Nebius, and IREN are all players in the "neocloud" market—specialized providers renting access to GPUs and related infrastructure for AI training and inference. Their financial profiles differ markedly. Nebius, based in Amsterdam, saw its AI Cloud business generate almost all group revenue in Q2 2026, with total revenue up 454% to $582.3 million. Adjusted EBITDA was $236.2 million, but the GAAP net loss from continuing operations was $190.4 million.

IREN, which is transitioning from Bitcoin mining to AI cloud services, reported fiscal 2026 revenue of $707 million, up from $501 million, but its net loss widened to $702.6 million from a profit of $86.9 million. The results included $638.8 million of noncash impairments, mainly tied to retiring mining equipment. The company has a development pipeline exceeding 5 GW across multiple regions, and it reported $4 billion of contracted annualized run-rate revenue for 2026 capacity—though only $1 billion was operating as of August 26. IREN cautions that these operating metrics are not recognized GAAP revenue.

A Competing Forecast and Broader Risks

The bull case is not without challengers. Gartner (IT) reportedly warned that 80% of neocloud providers could cease operating independently by 2030 if spending continues at its current pace—a forecast that could mean consolidation rather than outright bankruptcies. The debate intensified after stronger inflation data increased expectations of another Federal Reserve rate increase, which Reuters (TRI) cited as a contributor to the October 14 decline.

Beyond financing costs, the industry faces real-world constraints. Reuters reported a pause in new Texas data-center grid approvals and additional disclosure requirements, while Pennsylvania introduced environmental and community-approval safeguards. Amsterdam restricts new facilities and expansions, and Dublin now requires on-site generation for new connections. These regulatory hurdles can delay construction regardless of customer demand.

The Bottom Line

Ives' bullish call is best understood as a thesis, not a demonstrated buying opportunity. Strong AI demand and weak shareholder returns can coexist when financing, depreciation, and construction costs absorb the economics. CoreWeave's latest results already show that distinction. The upcoming hyperscaler earnings will be a critical test: if spending guidance validates Ives' optimism, the selloff may indeed prove to be a buying opportunity. But if credit markets continue to balk at the leverage, the neoclouds could face a more painful reckoning.

Correction: An earlier version of this article misstated the timeframe for IREN's revenue figures. The $707 million figure covers fiscal 2026, not a single quarter.