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The AI arms race has a very unsexy bottleneck
Everyone loves talking about AI like it’s all model launches and billion-dollar contracts. But the real plot twist is painfully boring: data centers have to get built, approved, and powered up first. And right now, BNP Paribas says that’s where the gap is opening up between CoreWeave and Nebius.
CoreWeave: the “show, don’t tell” story
BNP Paribas kept its Outperform rating on CoreWeave and slapped a $154 price target on it, implying roughly 80% upside from the Aug. 6 close. Why the optimism? Because CoreWeave’s partners are making progress that actually sounds like progress:
- Core Scientific delivered an extra 200 megawatts ahead of schedule
- Applied Digital finished about 75 MW at Polaris Forge 1
- Galaxy Digital delivered 133 MW of critical IT capacity at Helios
That matters because if capacity comes online sooner, CoreWeave can start turning those shiny AI contracts into actual revenue sooner. Less theater, more cash flow.
Nebius hits a zoning speed bump
Nebius, meanwhile, has a more awkward problem: its Vineland, New Jersey data center is still waiting on approvals after a long planning-board meeting that ended without the green light. The hearing is set to continue on August 17, and BNP Paribas called the zoning issue the most substantive hurdle.
That site is supposed to help support Nebius’ more than $17 billion contract with Microsoft, so any delay is not exactly a rounding error. The stock already got whacked, falling 13% Thursday as investors stared down the uncertainty like it was a pop quiz they didn’t study for.
Why investors should care
This is less about one analyst’s hot take and more about the market finally grading AI infrastructure companies on execution, not just ambition. If CoreWeave keeps landing capacity ahead of schedule, it could help profitability later this year. If Nebius keeps bumping into permitting drama, its premium valuation could get a little harder to defend.
Big picture: in AI infrastructure, the winner isn’t just the company with the biggest contract. It’s the one that can get the power on, the servers humming, and the regulators out of the way.