UBS: Data Centers & Neoclouds - How Much Is a Megawatt Worth?
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UBS released a report analyzing revenue, operating expenses, and capital expenditures on a per-megawatt basis across data center and neocloud business models. Revenue per MW varies dramatically, ranging from under $1 million to $55 million, driven by differences in business models, geographic locations, and contract terms.
Colocation providers generally exhibit lower per-MW revenue but benefit from stable, long-term contracts. Equinix (EQIX) leads colocation peers at approximately $5 million per MW, supported by its retail model and interconnection services. In contrast, wholesale colocation providers generate $3 to $4 million per MW. Neoclouds command significantly higher revenue, with CoreWeave (CRWV) at $39.1 million and Nebius (NBIS) at $8.4 million per MW, reflecting their vertically integrated GPU cloud services for AI labs.
However, neoclouds incur substantial operating expenses, including GPU depreciation and software engineering costs. CRWV and NBIS report per-MW OpEx of $18.6 million and $33.3 million, respectively. Emerging AI infrastructure providers like Cipher (CIFR), TeraWulf (WULF), and Core Scientific (CORZ) adopt landlord-style colocation models with net lease contracts, achieving stable revenue around $1.75 million per MW and average EBITDA margins near 85%.
UBS maintains Outperform ratings on DLR, EQIX, AMT, IREN, CIFR, WULF, CORZ, and RIOT. CRWV is rated Underperform with a $67 target price.
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