CoreWeave shares drop 15.5% as bond yields climb near 15%
Why it matters: The sell-off signals investors are demanding far more compensation to fund leveraged AI data-center expansion.
CoreWeave shares sank 15.5% on Wednesday while yields on its junk-rated bonds climbed to nearly 15%, adding to concerns that heavily leveraged AI infrastructure companies may be borrowing too aggressively for data-center buildouts. The yield to maturity on CoreWeave’s 9.625% bond due 2032 stood at 14.8%, and its 9.75% bond due 2031 traded around 14.9%. S&P rates the company B+. CEO Mike Intrator told employees the company’s backlog supports its debt load, but investors have turned more cautious as borrowing costs rise. Wells Fargo Investment Institute’s Luis Alvarado said the era of easy money is fading, while Freedom Capital Markets’ Paul Meeks said CoreWeave’s balance sheet looks weaker than neocloud peers because it has borrowed more and is building more facilities.