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CoreWeave stock, bond set for weekly plunge as rate-hike fears hit AI bet
Confirmed
In Short: CoreWeave's stock and bonds are experiencing a significant decline as fears over rising interest rates and debt sustainability hit the AI neocloud leader.
CoreWeave's stock price has dropped more than 26% this week, falling by more than two-thirds from its peak in June 2025. The company's bonds are also under pressure, with yields on its 2032 bonds reaching 15% following a sell-off.
The decline in CoreWeave's stock price is exacerbated by rising bond yields, which underscore investor concerns about the company's debt. Nvidia, which owns 10% of CoreWeave and counts it among its largest customers, has invested roughly $300 million in the company.
CoreWeave CEO Mike Intrator maintains that the market is acting 'irrationally' and remains confident in the company's business model. However, Elon Musk responded with 'Yikes,' indicating concern over the jump in bond yields.
Analysts at BCA Research noted that a hot inflation print triggered a sharp sell-off in CoreWeave, as its business model relies heavily on future data center demand. The cost of insuring against CoreWeave’s debt has surged to record highs, surpassing 1,000 basis points.
Despite the downturn, some analysts defended CoreWeave's funding strategy. Cathie Wood's ARK Investment Management continued to buy shares in the company, though CoreWeave's stock fell again on Friday.
CoreWeave's stock has lost about a fifth of its value in October, with shares down more than 6% in early trading after tumbling over 15% this week. The company's shares were the biggest decliner in the Nasdaq 100 on Wednesday.
Venture capitalist Chamath Palihapitiya highlighted that the AI buildout is increasingly funded by debt, with private credit playing a much bigger role than a year ago. He noted that CoreWeave targets 'unlimited' insurance money to fund its AI build-out.
Tommaso Leodari, chief investment officer at Dubai-based hedge fund Index & Cie, cautioned against taking CoreWeave as the poster child for AI, emphasizing that the rest of the tech complex is less sensitive to interest rates.
CoreWeave's stock market peak in June 2025 was at $187 per share, and the company's shares have lost over half of their value since then. A $6.3 billion deal commits Nvidia to purchase any unsold cloud computing capacity from CoreWeave through April 2032.
What this adds
The market's reaction to CoreWeave's debt concerns highlights the broader worries about the sustainability of AI demand and the potential risks associated with high levels of debt in the sector.
What's confirmed
- CoreWeave's stock price has dropped more than 26% this week, falling by more than two-thirds from its peak in June 2025. The company's bonds are also under pressure, with yields on its 2032 bonds reaching 15% following a sell-off.
- The decline in CoreWeave's stock price is exacerbated by rising bond yields, which underscore investor concerns about the company's debt. Nvidia, which owns 10% of CoreWeave and counts it among its largest customers, has invested roughly $300 million in the company.
- CoreWeave CEO Mike Intrator maintains that the market is acting 'irrationally' and remains confident in the company's business model. However, Elon Musk responded with 'Yikes,' indicating concern over the jump in bond yields.
- Analysts at BCA Research noted that a hot inflation print triggered a sharp sell-off in CoreWeave, as its business model relies heavily on future data center demand. The cost of insuring against CoreWeave’s debt has surged to record highs, surpassing 1,000 basis points.
- Despite the downturn, some analysts defended CoreWeave's funding strategy. Cathie Wood's ARK Investment Management continued to buy shares in the company, though CoreWeave's stock fell again on Friday.
- CoreWeave's stock has lost about a fifth of its value in October, with shares down more than 6% in early trading after tumbling over 15% this week. The company's shares were the biggest decliner in the Nasdaq 100 on Wednesday.
- Venture capitalist Chamath Palihapitiya highlighted that the AI buildout is increasingly funded by debt, with private credit playing a much bigger role than a year ago. He noted that CoreWeave targets 'unlimited' insurance money to fund its AI build-out.
- Tommaso Leodari, chief investment officer at Dubai-based hedge fund Index & Cie, cautioned against taking CoreWeave as the poster child for AI, emphasizing that the rest of the tech complex is less sensitive to interest rates.
- CoreWeave's stock market peak in June 2025 was at $187 per share, and the company's shares have lost over half of their value since then. A $6.3 billion deal commits Nvidia to purchase any unsold cloud computing capacity from CoreWeave through April 2032.
What's still developing
- But silver prices failed to recover, hitting a 3-month low as global tech stocks plunged, sinking Asian equity markets amid the worsening crash in AI neocloud leader CoreWeave.
- Giant AI chipmaker Nvdia (Nasdaq: NVDA) owns 10% of the stock, and counts CoreWeave − which buys specialised GPU chips to build data capacity it then rents out to hyperscalers such as Facebook owner Meta (Nasdaq: META) − among its largest customers.
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- A spike in borrowing costs, bad inflation data and a report by market research firm Gartner on AI infrastructure spending had pressured CoreWeave stock.
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- The yield on CoreWeave’s October 2031 maturity US dollar bond briefly surged past 16 per cent on Thursday.
- “The markets appear to be extrapolating a higher secondary-market bond yield as evidence the business model has stopped working, which we don’t think is the case,” they wrote in a note.
- He called claims of circular financing with Nvidia “ridiculous” and noted Nvidia’s stake is too small to support CoreWeave’s operations.