Investor doubts over data centre buildout hit AI stocks, bonds — SkimNews
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- CoreWeave shares fell 15% on the Nasdaq on Wednesday, then recovered nearly 6% on Thursday after Nvidia CEO Jensen Huang publicly signaled his support for the AI neocloud provider.
- CoreWeave's bond yields climbed above 15% — a level investors consider severely distressed — while credit default swap costs also soared.
- Shares of other neoclouds slumped: Cerebras fell about 13%, while Nebius Group and Iren Ltd. each dropped roughly 14% since the start of the week.
- Investors fleeing AI risk pushed the 10-year U.S. Treasury yield down more than 10 basis points on Thursday, even after consumer and wholesale inflation data pointed to persistent price pressures.
- A Gartner note from analyst Will Sommer warned that "multitrillion-dollar writedowns of AI infrastructure assets are more likely than not by 2032" and that more than 80% of neocloud providers may cease independent operations by 2030.
- Bell Canada is investing $1.7-billion in an initial Saskatchewan data centre buildout and plans to expand to 1.2 gigawatts of compute, with CoreWeave and Cerebras as anchor tenants under long-term, noncancellable agreements.
- Scotiabank analyst Maher Yaghi warned Bell's infrastructure-only model "does not eliminate tenant-credit risk," noting a default by either CoreWeave or Cerebras could interrupt payments to BCE and delay its return on investment.
Why it matters: Bell Canada's $1.7-billion Saskatchewan data centre bet hinges on CoreWeave and Cerebras surviving a bond market that has already priced their debt at distressed levels. If either anchor tenant falters, BCE's infrastructure-only model still leaves it exposed to delayed payments, per Scotiabank, and the broader neocloud sector faces potential consolidation by 2030.
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