Musk’s warning hits neocloud stocks as debt concerns mount

Shares of neocloud companies declined in premarket trading on Monday after Elon Musk said the sector could face consolidation and failures, adding to concerns over a widening gap between AI infrastructure investment and revenue generation.

CoreWeave, which has become a poster child for mounting concerns over heavy AI spending, led the declines with a 4.5% drop, while Nebius Group fell 3.4% and IREN dropped 3.3%.

Shares of Applied Digital and TeraWulf shed over 2% each, while Core Scientific lost 1.7%.