CoreWeave shares, bonds headed for steep weekly losses as AI borrowing concerns mount
CRWV•CoreWeave shares were down more than 15% for the week and its October 2031 bond yield briefly topped 16%, as investors worried about debt financing and rising borrowing costs.
1. Shares and bonds fall
CoreWeave shares dipped 4.1% in premarket trading Friday after rising 5.9% in the previous session. At Thursday’s close, they were down more than 15% for the week, on track for their biggest weekly decline in about two months and to erase a fifth of their value this month.
2. Debt costs climb
CoreWeave, a loss-making cloud company, has about $50 billion in debt. The yield on its October 2031 dollar bond briefly surged past 16% on Thursday, and the bond was set for a fifth straight weekly decline, down about 3 cents on the dollar this week. The cost of insuring against the company’s debt rose above 1,000 basis points to a record high this week.
3. Borrowing concerns
AI infrastructure stocks fell this week as hot inflation raised borrowing-cost concerns. BCA Research analysts said the inflation reading triggered a sharp selloff in CoreWeave because its business model is a highly indebted play on future data center demand, adding that the broader technology sector is, on average, considerably less sensitive to interest rates. Rival Nebius Group shares also fell and were set for their steepest weekly decline in two months.
