Wedbush: AI Data Center Price Hike Trend to Continue Benefiting CoreWeave and Nebius
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Nvidia-backed compute lessors CoreWeave and Nebius both beat Q2 expectations, with AI compute prices rising across the board — this means → the business is shifting from selling volume to commanding pricing power, tilting leverage toward suppliers.
How much did they actually earn?
Nebius posted Q2 revenue of $582 million, up 454% year-on-year. Adjusted EBITDA margin hit 40.6%, over 800 basis points above the Street's ~30% estimate.
CoreWeave reported Q2 revenue of $2.575 billion, up 158% year-on-year.
After the reports, Nebius shares jumped as much as 34% intraday; CoreWeave rose 19%. This means → the market is not just rewarding strong earnings — it is pricing in the ability to keep raising prices.
How much have compute prices risen — and who is paying?
Nebius ran its first compute-capacity auction. Nvidia Blackwell chips — the latest generation of AI training GPUs — cleared at 15% above the highest price Nebius had ever charged, and roughly 20% above existing pipeline pricing.
Short-term contracts (3–6 months) now carry annualized contract value per megawatt (ACV/MW) above $40 million. Standard contracts topped $20 million, versus a 2026 baseline of roughly $12 million. In plain terms = for the same megawatt of compute, short-lease pricing is now more than triple the start-of-year benchmark.
CoreWeave was even more direct: it raised prices across the board by 25% in July. CFO Nitin Agrawal's rationale was one sentence — "responding to the current demand environment." Even previous-generation GPU pricing is flat to higher versus years ago.
Why are short-term contracts so expensive?
Both management teams gave the same answer: immediately deliverable compute is extremely scarce. Nebius CEO Arkady Volozh described these buyers as "customers with immediate, time-bound needs."
Clients signing multi-year deals do not pay the same premium, because future data-center supply will keep expanding. This reflects a dynamic where the high price is essentially a "queue-jumping fee" — it is not that compute is worth this much, but that having it right now is worth this much.
BNP Paribas noted that Nebius's recent short-term contract economics are "roughly comparable to SpaceX's recently signed contracts."
How fast are new customers flooding in?
Nebius's Q2 total contract value (TCV) grew roughly 4× quarter-on-quarter. TCV from new customers alone grew over 9×.
Four "milestone" deals averaged over $1 billion each. Clients include Reflection, Cohere, a U.S.-based AI research lab, and a major U.S. quantitative fund.
About 70% of contracts include customer prepayments, shortening the payback period from a historical two-to-three years to roughly one year and ten months. This means → customers are willing to pay upfront to lock in capacity, easing Nebius's cash-flow pressure.
The other side of pricing power — how fast is cash burning?
Nebius spent roughly $5.657 billion in Q2 capex. Full-year capex is projected at $23.41 billion. Its contracted-capacity target was raised from 4 GW+ to 5 GW, with plans to deploy over 1 GW of new capacity annually from 2027.
CoreWeave had 1,500 MW of live compute at quarter-end. Morgan Stanley expects 2,000 MW by year-end and 3,150 MW by end-2027. Projected FY2026 free cash flow is negative $30.286 billion, with debt expected to reach roughly $38 billion by year-end.
In plain terms = both companies are raising prices and burning cash to expand at the same time. Margins look strong now because demand outstrips supply. Once the industry's hundreds of billions in new capacity comes online, whether today's premiums survive is a different question entirely.
What does Wall Street think — and where is the disagreement?
Wedbush Securities is the most bullish, saying the pricing commentary in both earnings calls "is highly consistent with its thesis" and that the uptrend will keep benefiting both companies.
Morgan Stanley analyst Nick Del Deo offered a caution: high-priced short-term contracts will not come online until later this year, and management explicitly stated they will "clearly impact revenue in 2027 and beyond" — the material effect on 2026 revenue is limited. Morgan Stanley maintains an Equal-Weight rating on Nebius with a $251.22 price target.
This reflects the market's central tension: whether pricing power can translate into durable profitability hinges on 2027 data — and with the cloud industry spending hundreds of billions to add capacity, whether long-run supply and demand can sustain today's premiums is the key question hanging over both stocks' valuations.
Content is for reference only, not financial advice.