The pressure on stocks continues, with CoreWeave ( NASDAQ : CRWV ), Nebius ( NASDAQ : NBIS ), and IREN ( NASDAQ : IREN ) all falling by about 2.5% during the weekend trading session.

On Sunday, Musk warned that for companies that rely heavily on AI data centers for their revenue, it has become more difficult to enter the debt market, and he predicted that there will be widespread consolidation and failures in the industry.

Musk stated that the debt market "has almost completely cut off any company that does not have substantial revenue from outside of the AI data centers from accessing funding channels."

This warning appeared after Musk stated that SpaceX had completed a $40 billion debt financing arrangement for Nvidia GPU. He mentioned that SpaceX was able to obtain financing due to its investment-grade credit rating, as well as mature revenue sources from satellite internet and rocket launches.

Elon Musk further predicted that many neocloud companies will eventually disappear or merge with their competitors, while ruling out the possibility of SpaceX acquiring any of these companies.

His remarks are particularly relevant to CoreWeave, Nebius, and IREN. These three companies are investing billions of dollars in building the computing infrastructure for AI, while also being highly dependent on external financing.

CoreWeave Stocks face growing concerns over debt

The company, which has received support from Nvidia, has accumulated approximately $50 billion in debt, and the yield on some of its bonds has risen to nearly 16%, reflecting investors' concerns about its future ability to raise funds for expansion.

Nevertheless, CoreWeave has secured commitments from important clients, including a backlog of revenue exceeding $100 billion as of the end of the second quarter. CEO Mike Intrator stated that the signed revenues are sufficient to cover debt obligations, but investors are still concerned about the timing of future cash flows.

Wall Street's view remains positive. With 21 buy ratings, 5 hold ratings, and 3 sell ratings, the market consensus is "moderate buy." The average 12-month target price is $133.25, which implies a potential increase of about 146% from last Friday's closing price. (See CRWV stock forecast)

Nebius Stocks continue to face pressure in a painful October

Last Thursday, the company announced a $3.5 billion financing arrangement with Citibank, which is intended to be used for data center construction and the procurement of GPU. As Nebius strives to fulfill its commitments on delivering computing power under the multi-billion dollar agreements reached with Microsoft and Meta, this financing arrangement provides additional resources.

However, the company faces substantial expenditure requirements, with planned capital expenditures reaching tens of billions of dollars. This makes Musk's warnings particularly relevant, as Nebius must continue to raise funds while new computing power facilities are being put into operation.

Wall Street believes there is still significant room for a rebound, with analysts' average target price at $302.09, implying a 90% increase from last Friday's closing price. Among the 13 analysts covering the stock, 9 recommend buying, 3 suggest waiting and seeing, and only 1 recommends selling. Therefore, the consensus rating for NBIS is "moderate buy." (See NBIS stock forecast)

IREN Stocks also face their own financing challenges

The company expects to spend between $25 billion and $30 billion in the fiscal year 2027, which is a major commitment that requires substantial financial support. Its strategy is to secure long-term AI computing contracts, while also expanding data center capacity and the scale of its GPU fleet.

IREN indicates that customer prepayments and debt financing can cover most of their infrastructure expenditures, however, rising borrowing costs may make these plans more expensive.

However, Wall Street seems to have particular confidence in the prospects of IREN, giving it the strongest consensus among analysts among the three stocks. With 8 buy ratings and 2 hold ratings, IREN has been rated as a "strong buy," and its average 12-month target price is $82.56, which implies a potential increase of about 231% from last Friday's closing price. (See IREN stock forecast)

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