Nebius (NASDAQ: NBIS) and CoreWeave (NASDAQ: CRWV) delivered strong gains in the first half of 2026, but both stocks have pulled back sharply since July.
Nebius surged more than 200% through the first half of the year before retreating to a year-to-date gain of approximately 125% as of July 30.
CoreWeave posted a solid 39% gain through the first half, but that figure has since shrunk to just 3% for the year.
Both companies operate as neocloud providers, offering cloud computing services specifically tailored for artificial intelligence workloads.
Demand for AI computing capacity remains extraordinarily high, with every player in the sector racing to build out infrastructure and capture market share.
A key trigger for the sell-off came in early July when Meta Platforms (NASDAQ: META) hinted it was considering entering the cloud computing business.
Meta Chief Executive Officer Mark Zuckerberg had previously said the company would only do that if it had computing capacity in excess of its own internal needs.
That statement rattled investors in both Nebius and CoreWeave, since both companies benefit directly from Meta not having sufficient computing capacity of its own.
However, remarks from Meta’s Q2 earnings conference call suggest the panic may have been overblown and that demand from the tech giant remains intact.
During that call, Zuckerberg stated: “We’re getting a lot of offers for compute at a significant premium over what we paid for it,” signaling Meta intends to keep consuming capacity.
Meta indicated it will still take all of the computing capacity it can handle, because it can turn a profit over what it is paying Nebius and CoreWeave for access.
Both Nebius and CoreWeave also count Microsoft (NASDAQ: MSFT) among their major clients, further diversifying their customer base beyond Meta alone.
Wall Street analysts expect Nebius to post revenue growth of 540% in 2026 and 238% in 2027, representing a truly extraordinary pace of expansion.
CoreWeave is growing at a comparatively slower rate, with analysts forecasting 146% revenue growth in 2026 and 99% growth in 2027.
Neither company is currently profitable, with both spending aggressively on data center infrastructure as they race to scale their operations.
Eventually, both companies could develop business models that mirror established cloud computing giants, though analysts caution that profitability could still be years away.
Investors comfortable with unprofitable, high-growth companies carrying some risk may find both stocks appealing at current levels following the recent pullback.
Those seeking cash-generating investments may prefer more established cloud computing companies with proven profitability and steadier revenue streams.
The Meta-driven sell-off appears to have created a potential buying opportunity, provided investors understand the risks tied to customer concentration and continued unprofitability.
Whether this dip proves to be a turning point or a warning sign will likely depend on how quickly both companies can translate explosive revenue growth into sustainable earnings.
