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Elon Musk Warns of Cloud Computing Stocks Decline; NEBIUS and CoreWeave Drop Over 3%

On October 26, U.S. stock market cloud computing concept stocks collectively fell in pre-market trading, with NEBIUS, IREN Ltd, CoreWeave, Hut 8, and Riot Platforms dropping over 3%. The news comes after Elon Musk warned that the tightening credit market is expected to lead to large-scale bankruptcies and consolidations among over 200 specialized cloud computing providers. Musk stated on social media that the debt market has nearly cut off financing channels for companies without actual revenue other than data centers, making it difficult for these companies to secure funds from the debt market. In contrast, SpaceX can obtain financing due to its investment-grade credit rating, supported by substantial revenues from its Starlink and rocket launch businesses, unlike some new cloud providers that heavily rely on renting computing power to AI developers. He anticipates that over 200 emerging tech companies will face large-scale bankruptcies and consolidations, noting that 'some companies may survive, but only a very few.'

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