Shares fell 10.4% as investors focused on clear deceleration risks and cautious capacity ramp commentary, despite strong contract announcements. The market appears concerned about the timing and pace of future capacity deployment and margin visibility amid rising pricing and funding complexity.
- $4 billion ARR contracted for 2026 capacity, with $1 billion currently operating; however, meaningful revenue from 2027 and beyond remains dependent on new deployments and customer signings.
- The company highlighted supply constraints and multi-year physical build timelines, emphasizing GPU capacity as the limiting factor rather than customer demand.
- Pricing on 3-year contracts rose 125% since November to over $20 million per megawatt, signaling margin pressure/challenges despite favorable deal economics and prepayments funding 45-55% of GPU CapEx.
- $6.5 billion of GPU financing secured recently, including $2.8 billion without investment-grade offtake at single-digit pricing, highlighting capital intensity and risk profile in funding newer capacity.
- Management stressed conservatism in ramp timing and prioritizing strategic merit in contracts, indicating a cautious outlook rather than aggressive expansion guidance.
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