CRWV/NBIS 3Q Preview; Strong Demand Likely Continues With Focus on Financing

We expect next week's neocloud earnings to highlight a continued insatiable demand backdrop, with strength across pricing and margin structure. The key focus for investors remains on the financing topic, where we expect both companies to provide greater clarity on medium-term financing needs and outline various approaches to reducing capital intensity (pre-payments, vendor financing etc.), which continue to be possible given the favorable demand vs. supply imbalance. We add greater granularity into our model on the contract mix (short-term vs. long-term and associated revenue/MW) and increase cost of financing given credit market dynamics. The net result is higher longer-term revenue, but higher interest cost leaves our EPS roughly unchanged. For CRWV, we remain positive on fundamentals heading into the 3Q print, with the stock down 40% off 2Q earnings as credit market dynamics sent CDS spreads and bond yields higher; we expect supply constrained market dynamics to result in the higher