The excess supply in AI servers created a revenue opportunity for Meta Platforms (META). Meta overspent on compute power. As a result, sources shared that it is in discussions with Anthropic (ANTHRO) to lease its compute.
Meta could earn revenue of up to $10 billion in two years if Anthropic leases its computing power. Anthropic is in the process of listing its shares through an IPO. Ahead of the rumored deal, META stock bottomed at below $550 in late June to trade as high as around $680.
Stock markets priced in the shrinking total addressable market for neocloud providers and hyperscalers. CoreWeave (CRWV) traded in a range of $100 - $140 in early summer. CRWV stock closed at $73.21 last Friday. The firm has high debt levels. Its debt/equity of 7.4 times is a result of spending heavily to acquire AI hardware.
Nebius (NBIS) shares peaked at $299.86 in June. It lost nearly a third of its value in just a month. Markets believe that Meta, along with Oracle (ORCL), Microsoft (MSFT), and Amazon (AMZN), are more attractive sources for renting AI server power. Traders are unwilling to pay a premium on NBIS stock.
In this segment, Coherent (COHR), Celestica (CLS), Ciena (CIEN), Fabrinet (FN), and Lumentum (LITE) also fell by 14% or more in the last month.
