CoreWeave Drops 16% as Bond Yields Hit 15% on AI Debt Fears — SkimNews
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- CoreWeave shares fell 16% on Wednesday while yields on its 9.625% 2032 bond and 9.75% 2031 bond climbed to roughly 14.8% and 14.9% respectively
- Wells Fargo's Luis Alvarado said the "era of easy money" from the year's first nine months is "starting to disappear," with investors now scrutinizing every marginal dollar and the concessions issuers offer
- Tech investor Chamath Palihapitiya posted a chart of CoreWeave's 2032 bond on X late Tuesday noting its yield "touched 15%," prompting Elon Musk to reply with a single word: "yikes"
- Freedom Capital Markets' Paul Meeks called CoreWeave's balance sheet "relatively bad" versus neocloud peers because of heavier borrowing, but added the situation is "not deteriorating" and should improve once data centers come online
- Oracle shares dropped nearly 7% the same day, with its 6.25% November 2032 bond yield rising to 7.24%, as AI-debt concerns spread beyond CoreWeave
- Dell cratered 10% and neocloud peer Nebius fell 9%, while the Nasdaq Composite lost 1.4%, hitting non-"Magnificent Seven" tech stocks hardest
- JPMorgan estimates hyperscalers are on track to spend $800 billion this year on AI infrastructure, a figure expected to exceed $1 trillion annually by 2027
Why it matters: Investors who once raced to fund the AI buildout are now demanding far more risk compensation — CoreWeave's bond yields alone spiked to roughly 15%, and the flight from AI debt dragged Oracle down 7%, Dell down 10%, and Nebius down 9%, pushing the Nasdaq 1.4% lower. With JPMorgan projecting $800 billion in hyperscaler AI spending this year heading past $1 trillion by 2027, lenders are drawing a line on how much balance-sheet risk they're willing to underwrite.
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