CoreWeave Shares Drop 15% Amid Concerns Over AI Borrowing Binge
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CoreWeave's stock fell 15% on Wednesday as bond yields surged to nearly 15%, raising concerns about the company's heavy borrowing for AI investments. The decline was exacerbated by a broader sell-off in AI-focused 'neocloud' stocks following a negative outlook from Gartner.
CEO Mike Intrator defended the company's business model, stating that the market is acting 'irrationally' despite the significant drop in stock and bond prices. As investor fear grows regarding the sustainability of AI investments, CoreWeave's bonds have also seen a sharp decline, trading at 81 cents on the dollar.
Sources
Every quote below is verbatim from the article it is attributed to.
“Shares of CoreWeave sank 15%, while yields in its bonds blew out further.”
CNBC — CoreWeave shares tumble as bond yields near 15% on concern about AI borrowing binge
“CoreWeave plunged as shares in other AI-focused "neoclouds" also sold off after research firm Gartner predicted an industry shakeout.”
IBD — Why Gartner AI Outlook Sent CoreWeave Stock, Neoclouds Reeling
“CoreWeave's bonds issued six months ago fell to 81 cents on the dollar earlier Wednesday, yielding more than 15%.”
MarketWatch — CoreWeave's AI bonds tumble, raising red flags for the wider market“As a key corner of the artificial intelligence trade takes a beating on Wednesday, traders are betting it could get even worse.”
CNBC — Traders pile into 'bubble puts' on CoreWeave as neocloud stocks plunge“Michelle Fox / CNBC: CoreWeave stock drops 15%+ and its bond yields near 15%, over concerns that some tech companies are borrowing too heavily for the AI build-out; ORCL drops 8%+ — ”
techmeme — CoreWeave stock drops 15%+ and its bond yields near 15%, over concerns that some tech companies are borrowing too heavily for the AI build-out; ORCL drops 8%+ (Michelle Fox/CNBC)
“CoreWeave Inc. Chief Executive Officer Mike Intrator, facing a plunge in the company’s stock and bond prices, said the market is acting “irrationally” and that he remains confident in the AI cloud”
Bloomberg — CoreWeave Says Market Acting ‘Irrationally,’ Stands by Model
Earlier versions
- Oct 14, 4:45 PM — CoreWeave Shares Tumble 15% As Bond Yields Near 15% Amid AI Borrowing Concerns (2/2)
- Oct 14, 8:22 PM — CoreWeave Shares Drop 15% As Bond Yields Near 15% Amid AI Debt Concerns (3/3)
- Oct 14, 8:46 PM — CoreWeave Shares Drop 15% As Bond Yields Near 15% Amid AI Borrowing Concerns (3/3)