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20 minutes ago · 3:45 p.m. EDTStephen Alpher
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Did Musk ring a bell for the bottom? Neoclouds gain Monday
SpaceX SPCX$146.89·Market Closed CEO Elon Musk caused a stir over the weekend, predicting the imminent collapse of much of the so-called neocloud sector.
“200+ neoclouds are going to see guppy-level death and consolidation,” said Musk. “Some will make it through, but not many.”
These companies rent out computing power for AI workloads. They use contracts with AI labs as collateral to borrow money for massive numbers of GPUs and data center buildouts, putting them in highly leveraged positions — meaning even a modest stumble or higher interest rates can put their equity at risk.
The formerly red-hot stocks of the neocloud sector have already seen severe price declines and questions about solvency.
SpaceX — with its own data centers and sales of computing power — is a competitor with the neoclouds, but is it possible Musk rang the bell for the bottom?
Sharply lower in pre-market action on the Musk remarks, the neoclouds have reversed course and risen on Monday.
Among the gainers: CoreWeave (CRWV) +3.5%, IREN IREN$25.41·Market Closed +4%, Hut 8 HUT$62.93·Market Closed +4.2%, TeraWulf WULF$11.97·Market Closed +8.1%.
