Wall Street's skepticism towards CoreWeave is puzzling, especially when its stock has remained flat for a year while rivals like Amsterdam-based Nebius and Australia's Iren have surged. Yet, CoreWeave is actually far ahead in building its business and competing with established cloud providers. According to S&P Global Market Intelligence analyst consensus, CoreWeave trades at just 2.2 times its projected 2028 revenue, versus roughly 2.7 times for Nebius and Iren. The 2028 timeframe is key because that's when customer contracts signed recently by all three companies will begin generating revenue. This valuation gap creates an opportunity for investors with higher risk tolerance who are betting on the AI boom.

CoreWeave is currently the largest of the three, with projected 2025 revenue of $12.9 billion—about four times Nebius's figure, which itself is roughly four times Iren's. Based on the latest investor disclosures, CoreWeave operates the most data centers, at least 51, with 1.5 gigawatts of live power capacity and another 3.7 gigawatts under contract, most of which will come online over the next four years. But competitors are catching up quickly: Nebius aims to sign over 5 gigawatts of power capacity by year-end, and Iren plans to have 1.2 gigawatts live by the end of next year.

The valuation discount likely stems from concerns about CoreWeave's customer concentration. Microsoft, which once accounted for nearly all its revenue, still contributes over a third. Other top clients include Meta and OpenAI. The worry is that some tech giants may eventually stop buying CoreWeave's compute services—Microsoft is heavily investing in its own data centers, as are Meta and Google, which has called external cloud compute a stopgap until its own capacity is ready. Google is also a CoreWeave customer. In contrast, Paul Meeks, a director and technology research head at Free Market Capital Management, notes that Nebius diversified early into large financial institutions rather than relying solely on tech giants. Meeks holds all three emerging cloud stocks and has been adding to his CoreWeave position.

There's good news on diversification: as of June 30, CoreWeave's largest client accounted for 36% of revenue, down from 71% a year earlier, with the second and third clients combined contributing another 36%. By comparison, Nebius reported its top customer at 25% and second at 15% as of December 31. In April, CoreWeave partnered with hedge fund Jane Street Capital, one of its investors, and this month signed a multi-billion-dollar deal with Hudson River Capital, another backer.

The market may be overemphasizing customer concentration while ignoring CoreWeave's competitive edge. Success in compute leasing often hinges on which company can build and deliver new capacity on time. CoreWeave has already brought substantial capacity online, making it likely that potential clients see it as more reliable than peers. Its capital efficiency is also superior: in the June quarter, CoreWeave's capital expenditure-to-revenue ratio was 2.5 times, the lowest among the three, versus above 9 times for Nebius and Iren. While none have achieved positive free cash flow yet, CoreWeave's first-mover advantage could help it reach profitability sooner.

Debt concerns also weigh on investor sentiment. S&P Global data shows CoreWeave's net debt, excluding cash, was 8.2 times its trailing-twelve-month EBITDA as of June 30, compared with 4.7 times for Nebius. Iren, still in early expansion, has a much higher ratio of 50.6 times. However, these metrics will improve rapidly as contracts convert to revenue. As of June 30, CoreWeave's remaining performance obligations stood at $103.7 billion, with 80% expected to be recognized over the next four years, up from $60.7 billion in December. That implies EBITDA could double to $7.5 billion in 2026 from the trailing level, and analysts project it will more than double again to $16.6 billion in 2027, significantly reducing leverage. Nebius reports a locked-in order book of "over $40 billion," while Iren said Thursday it aims to sign contracts worth $4 billion in annualized recurring revenue by year-end. Analysts forecast Iren's EBITDA will reach $2 billion in the next twelve months, up from $34.7 million in the past year, with Nebius expected to hit $1.4 billion this year and $6.4 billion next.

Meeks summarizes: "At the end of the day, the compute capabilities of the three aren't that different; what matters is who can actually build out capacity." His verdict: "Purely on valuation, CoreWeave is the best buy." Many institutions agree. In a research note this week, Truist said, "CoreWeave's discount to other emerging cloud peers doesn't match its leadership position in the industry."