Nebius Group, listed on Nasdaq, is growing faster in the AI infrastructure space compared to CoreWeave, despite CoreWeave's substantial revenue backlog. CoreWeave relies on a model of leased infrastructure and significant debt to expand, while Nebius develops its own cloud software, storage, and networking solutions, which could give it a unique edge.
Revenue backlogs and debt burdens
The company’s operations span over 1 gigawatt of power capacity across multiple data centers. It also reported a revenue backlog of $99.4 billion, showing significant future potential. However, transforming this backlog into actual revenue depends on timely delivery of computing resources to customers.
Nebius reported Q1 2026 revenue of $399 million, which marks an impressive 684% year-over-year increase. The company has secured power access for more than 4 gigawatts, supporting future infrastructure expansion. Still, much of this planned capacity remains under construction or awaiting customer adoption before it can become revenue-generating.
Major contracts and financial risks
Nebius has secured major customer contracts, starting with a $19.4 billion deal with Microsoft through 2031. The agreement includes up to $17.4 billion for GPU systems and an additional $2 billion in potential service purchases. Meanwhile, Meta Platforms has committed to spending $12 billion in dedicated capacity over the next five years, with an additional $15 billion obligation if Nebius cannot sell surplus capacity. These deals reduce the risk of underutilized infrastructure, ensuring demand for the computing resources they plan to deploy.
In contrast, CoreWeave’s financial situation is more complex. The company ended Q1 with $25.1 billion in debt and $10.1 billion in operating lease liabilities. Its net interest expense hit $536 million in the first quarter, leading to a $740 million net loss. Adjusted operating margin plummeted to just 1% after accounting for depreciation and amortization, indicating that much of its revenue is consumed by financial and operational obligations.
Nebius spent $2.47 billion on property, equipment, and intangible assets in Q1. The company generated $2.3 billion in operating cash flow, partly driven by a $3.2 billion increase in deferred revenue. This reflects payments received in advance for services not yet delivered. While these prepayments aid in funding growth, they do not represent consistent, recurring cash flow for the company.
Long-term returns and shareholder value
CoreWeave is currently the more established business, with a mature revenue backlog and extensive operations. However, its heavy reliance on debt and operating leases may limit its long-term returns. The company’s ability to manage its financial burden and sustain profitability remains a key factor for investors.
Nebius, with its lighter financial commitments and strategy of owning its own data centers, may offer better long-term value for shareholders. Its focus on internal development and securing high-value contracts provides greater control and stability. However, the company must successfully bring its new capacity online without excessive debt or equity dilution to maintain investor confidence.
Ultimately, the better neocloud stock depends on whether CoreWeave's scale and large revenue backlog can outweigh its financial challenges, or if Nebius can convert its robust customer agreements and better capital structure into superior returns for investors.