TLDR
- CoreWeave (CRWV) stock closed at $65.78 on Wednesday, down 15%, as its bond yields climbed to about 15%.
- CEO Mike Intrator told staff the market is acting “irrationally” and that the $104 billion backlog covers the company’s debt.
- Net interest expense rose to $640 million last quarter, and CoreWeave posted a $626 million net loss.
- Oracle dropped 9%, Nebius fell 10%, Dell slid about 11%, and the Nasdaq Composite ended down 2%.
- Cathie Wood’s ARK Invest bought about $12.4 million of CoreWeave stock during the dip.
CoreWeave (CRWV) stock closed at $65.78 on Wednesday, a drop of 15%. Investors sold hard as yields on its bonds pushed toward 15%.
CoreWeave, Inc. Class A Common Stock, CRWV
The 9.625% notes due in 2032 yielded 14.8%, while the 9.75% notes due in 2031 yielded about 14.9%. Yields rise when bond prices fall.
The 2032 bonds touched 15% on Tuesday before closing near 14.5%. It was not a fun week to hold the debt.
Why the selloff spread
Chamath Palihapitiya pointed to the bond move on X late Tuesday. Elon Musk replied with a single word: “yikes.”
Oracle fell nearly 9%, and its 2032 bond yield rose to 7.24%. Nebius lost 10%, and Dell slid about 11%.
The Nasdaq Composite ended down 1.9%. A hotter-than-expected inflation report added to worries about borrowing costs.
CEO Mike Intrator tried to calm staff in a memo seen by CNBC. He wrote that markets sometimes act “irrationally” when a new type of tech company is being built.
He said the backlog “more than supports all of our debt obligations.” That backlog stands at about $104 billion.
Second-quarter revenue more than doubled to $2.58 billion. CoreWeave also landed over $25 billion in new commitments after the quarter closed.
Costs are climbing too. Net interest expense jumped from $267 million to $640 million, and the company lost $626 million.
CoreWeave plans to spend $35 billion to $39 billion on infrastructure in 2026. S&P rates the company B+, which is junk territory.
What analysts and funds are saying
Paul Meeks of Freedom Capital Markets called the balance sheet “relatively bad” next to other neocloud peers. He said he does not share the repayment worries, though.
Luis Alvarado of Wells Fargo Investment Institute said investors now want more pay for taking on risk. In his view, the easy money of the first nine months is fading.
Other AI financing plans have hit snags. Firmus scrapped a $5.5 billion stock offering, and AirTrunk reportedly pushed a $1.5 billion offering to next year.
Analysts remain upbeat, with 20 Buy, five Hold and two Sell ratings. The average price target is $143.96.
ARK Invest bought about $12.4 million of CoreWeave stock on Wednesday. Earnings are due in November, and Intrator plans to address the concerns on that call.
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