Shares of CoreWeave fell 15.5 percent to $65.78 on Wednesday as investors worried about the firm’s $35.6 billion debt. The company uses loans to buy expensive Nvidia chips. Analyst Gil Luria said, "If the AI cycle sputters, CoreWeave is gonna be the first to go." Many now fear financial risks.
Synopsis
CoreWeave, a prominent data center operator, faced a notable 15.5 percent decline in its stock price, settling at $65.78. Investors expressed concerns about the firm's hefty $35.6 billion debt load and escalating interest rates. The company's strategy of financing the acquisition of expensive semiconductor chips from Nvidia adds to its financial risks.
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Shares of US data center operator CoreWeave plunged Wednesday on worries over its huge debt pile in a period of rising interest rates.
The New Jersey company, which builds data centers and loans the operations to tech giants like Meta or Microsoft, finished down 15.5 percent at $65.78.
The company has turned to debt to finance hefty purchases of pricey semiconductor chips from Nvidia. CoreWeave had $35.6 billion in debt at the end of June, according to US securities filings.
On Wednesday, yields on CoreWeave bonds due for repayment in 2031 and 2032 surged to near 15 percent, reflecting heightened angst over the company's prospects.
The company's financial position leaves CoreWeave especially vulnerable to a sudden weakening in AI financing, said Gil Luria, an analyst at DA Davidson.
"If the AI cycle sputters...CoreWeave is gonna be the first to go," Luria said Wednesday on the Prof G Markets podcast.
"It's a poster child for bad behavior, for borrowing at very high rates to build a speculative asset," Luria said.
CoreWeave Chief Executive Mike Intrator told employees the market was behaving "irrationally," according to a memo cited by Bloomberg that reiterated confidence in the company's business model.
CoreWeave made its Wall Street debut in March 2025 at $39, rising quickly in the ensuing months on AI enthusiasm before falling later that year.
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