Why Meta's cloud business would be 'very bad' for these 2 companies

July 2, 2026 - 03:37

D.A. Davidson's head of technology research, Gil Luria, has issued a stark warning about Meta's potential entry into the cloud computing market. According to Luria, if Meta moves forward with building out its own cloud infrastructure for external customers, it would be "very bad" for two specific companies: CoreWeave and Nebius.

Luria explained that Meta's scale and existing data center footprint give it a massive advantage. Unlike traditional cloud providers that rely on third-party hardware and software stacks, Meta has been developing its own custom silicon and networking solutions for years. This vertical integration would allow Meta to offer compute services at significantly lower costs than competitors.

For CoreWeave, which specializes in GPU-heavy cloud services for AI workloads, a Meta cloud would directly undercut its core value proposition. CoreWeave has grown rapidly by offering access to Nvidia GPUs, but Meta could potentially offer similar or better performance at lower prices using its own chips.

Nebius, a smaller European cloud provider, would face even steeper challenges. The company has been trying to carve out a niche in AI and high-performance computing, but it lacks the scale to compete with a Meta-backed cloud. Luria noted that Nebius would likely struggle to attract enterprise customers if Meta enters the space, as businesses would prefer the stability and pricing power of a tech giant.

The analyst emphasized that this is not a guaranteed outcome, but the possibility alone creates significant uncertainty for both CoreWeave and Nebius. Investors in these companies should watch Meta's infrastructure announcements closely, as any concrete move toward a public cloud offering could trigger a sharp revaluation of their stocks.