There are concerns, CoreWeave shares sink 13%, here is why
Landon Capital News
CoreWeave (NASDAQ: CRWV) shares tumbled 13% on Wednesday as investors focused on mounting financing risks across the AI infrastructure sector, after Elon Musk responded “Yikes” to a warning about the company’s soaring bond yields. Nebius Group (NASDAQ: NBIS) shares fell 8%, extending pressure on companies building out expensive computing infrastructure for artificial intelligence.
The selloff followed a post by venture capitalist Chamath Palihapitiya, who shared a chart showing the yield on $1.25 billions of CoreWeave’s unsecured bonds maturing in 2032 reaching nearly 15% on Tuesday before closing at a record 14.5%. Musk replied to the post with the single word “Yikes.”
The bond-market move has intensified concerns about the cost of financing CoreWeave’s aggressive expansion and the sustainability of the broader AI infrastructure boom. While demand for computing capacity remains strong, investors are increasingly scrutinizing the debt required to build data centers and acquire expensive Nvidia (NASDAQ: NVDA) chips.
CoreWeave has raised more than $35 billion this year through a combination of chip-backed loans, high-yield bonds, convertible bonds and share sales. Its debt and lease obligations totaled about $52 billion at the end of June, according to the Financial Times.
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