Nebius and CoreWeave Stocks are Plummeting. Is It Time to Buy the Dip?

The first half of 2026 was great for investors in Nebius (NASDAQ: NBIS) and CoreWeave (NASDAQ: CRWV). Nebius' stock rose more than 200%, while CoreWeave's was up a solid 39%. However, all that changed once July arrived. With investors making major changes to their portfolios and taking profits, Nebius's year-to-date gain fell to about 125% while CoreWeave is up just 3% for the year (as of July 30).

Now that Nebius and CoreWeave are down from their 2026 highs, investors may be wondering if the party is over for these two stocks or if it's time to buy the dip. Let's take a look at why these two started selling off to begin with, and if there's any hope for the future.

Image source: Getty Images.

Some language from Meta Platforms ignited the sell-off

Both Nebius and CoreWeave are neocloud providers. This is essentially a cloud computing service whose products are tailored for artificial intelligence (AI) computing usage. Demand for AI computing power is off the charts, and every company involved in the sector is scrambling to build out as much computing capacity as possible to capture market share. CoreWeave and Nebius are no different than any other hyperscaler and are undergoing rapid expansion.

They both have contracts with major AI businesses, including Meta Platforms (NASDAQ: META) and Microsoft (NASDAQ: MSFT). Although companies like Meta and Microsoft are building their own data centers, they also like to rent some computing capacity to give them flexibility based on what they need at any given time. With these two being major clients of both CoreWeave and Nebius, it makes these two more risky stock picks, as an adverse move by either of these huge tech companies could harm Nebius and CoreWeave.

That's exactly what happened at the start of July, as Meta Platforms dropped hints that it was considering entering the cloud computing business. Meta Chief Executive Officer Mark Zuckerberg had previously said that the company would only do that if it had computing capacity in excess of its internal needs. So this naturally caused a panic in CoreWeave and Nebius' stock because they thrive from Meta not having enough computing capacity.

As a result, the stocks sold off. However, I think investors are missing the bigger picture here.

Meta isn't cutting computing demand

During Meta's Q2 conference call, Zuckerberg stated: "We're getting a lot of offers for compute at a significant premium over what we paid for it." Meta will still take all of the computing capacity it can handle, because it can turn a profit over what it's paying Nebius and CoreWeave for it. That should bring some confidence back to investors in these two stocks, as the fear that caused them to sell off isn't really applicable.

That allows Nebius and CoreWeave investors to assume the future is bright, and also makes the stocks look pretty cheap. Neither of these two companies is profitable, so valuing them on sales is the best tool that investors have.

NBIS PS Ratio (Forward) data by YCharts

Nebius may look more expensive on paper, but it's growing at a jaw-dropping pace. Wall Street analysts expect 540% revenue growth in 2026 and 238% in 2027. That's simply incredible expansion, and with Meta indicating that it's still intending on following through with its spending plans, it's in a great spot.

CoreWeave is much cheaper, but it's also growing more slowly. In 2026, Wall Street expects 146% growth and 99% next year. Those are still strong growth figures, indicating that CoreWeave has a ton of upside ahead.

Another issue inventors will point out with these two is the lack of profits. Both companies are spending every penny that they have on data centers, and are deeply unprofitable right now. Eventually, they could establish a viable business model that mirrors some of the cloud computing giants, but that could be years down the road.

If you're OK with investing in unprofitable companies that have some risk, then these two stocks are decent picks. However, if you want cash-generating investments, there are other cloud companies that would be much better suited for your investment dollars.

Keithen Drury has positions in Meta Platforms, Microsoft, and Nebius Group. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. The Motley Fool has a disclosure policy.