CoreWeave shares, bonds slide further as AI debt fears mount
CRWV•CoreWeave shares fell 6% in premarket trading after dropping more than 15% on Wednesday, while the yield on its 2031 bonds rose above 16%. The company has around $50 billion in debt, and the cost of insuring that debt against default has climbed to about 1,000 basis points.
1. Debt concerns deepen
CoreWeave shares and bonds fell further despite CEO Mike Intrator telling employees that the company’s deal backlog more than covers its debt obligations. The yield on its April-issued bonds due 2031 rose past 16%, while the cost of insuring its debt against default climbed to around 1,000 basis points, a level implying nearly a 63% chance of default within five years, up from about 30% a year ago.
2. AI spending scrutiny
CoreWeave has around $50 billion in debt and raised its annual capital spending forecast in August by $4 billion, to between $35 billion and $39 billion. Analysts expect revenue of nearly $13 billion and a loss of $2.13 billion this year. Gartner said about 80% of neoclouds could shut down by 2030 and that more than $3.5 trillion of AI infrastructure spending could face impairment if current investment continues.
3. Market spillover
The Philadelphia Semiconductor Index has fallen 11.6% over six sessions, erasing more than $1.6 trillion in market value, while the Nasdaq has declined more than 3%. Neocloud rivals Nebius, Applied Digital and Iren fell between 3.2% and 5% on Thursday.
