US neocloud firms slip after Monday's brief recovery

IREN

Tue 11:40

** Shares of US neocloud companies fall in premarket trading, stalling a nascent recovery a day earlier following last week's sharp selloff amid AI spending concerns
** Nebius NBIS.O drops 3.1%, CoreWeave CRWV.O slides 3.2% and IREN IREN.O declines 2.7%
** Fueling the jitters, shares of South Korean AI services firm Elice Group 0158S0.KQ plunged 32% in their market debut in Seoul
** Fed rate-hike concerns have pressured neoclouds as investors fear higher borrowing costs will hurt the companies' ability to fund their AI infrastructure buildout 
** The Roundhill Neocloud ETF NCLD.O that tracks major neocloud stocks has remained stuck in a downturn, losing over 27% in value since its inception in early August
** Global chip stocks came under pressure last week on worries over CoreWeave's massive debt and reports of Chinese memory chipmaker CXMT's progress in developing a denser memory-cell architecture 
** HSBC reiterated its "reduce" rating on CoreWeave while noting that its long-term earnings estimates are 50%-70% below consensus 
** "Rising yields and debt market concerns could stop neoclouds from building speculative capacity, which could have been offered under lucrative short-term contracts," HSBC added
** As of last close, NBIS stock up 103.4% YTD while CRWV and IREN down 14.6% and 26.6%, respectively

 (Reporting by Jayasree Prabhu)
 ((jayasree.prabhu@thomsonreuters.com))