CRWV:Long-term Holding Hinges on Conviction in GPU Demand.

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A few weeks ago, we analyzed Nebius. Shortly after, Coreweave went public on March 28. Following the IPO, we observed significant stock price fluctuations, which we believe are closely tied to the uncertainties surrounding external GPU demand growth. The market seems to be highly divided in its outlook.

From a company-specific perspective, Coreweave currently stands ahead of Nebius. Coreweave benefits from more long-term contracts and enjoys higher recognition among major clients. For instance, while Microsoft has reduced its collaboration with Coreweave, there are reports that Google has recently signed a substantial partnership agreement with Coreweave, alongside new orders from OpenAI. Nebius, in comparison, has not yet secured any large-scale client benefits.

The nature of GPU leasing is somewhat similar to real estate, where having stable, long-term contracts with major clients is key. These contracts can be used as collateral to secure financing for expansion.

Following Nebius' latest earnings report, the market momentarily viewed Nebius as a more typical GPU leasing player rather than a cloud services provider(a higher valuation multiple). This change primarily stems from Nebius not adequately showcasing the differences between itself and companies like Coreweave in its recent earnings. It is still in the phase of building data centers and acquiring clients.