Its shares are down more than 6% in early trading after tumbling over 15% this week
Published Fri, Oct 16, 2026 · 09:53 PM
COREWEAVE’S shares and bonds were set for steep weekly losses on Friday (Oct 16), underscoring investor worries over the cloud-computing company’s US$50 billion debt load that has rippled in the artificial intelligence industry.
The Nvidia-backed company came into focus this week after the latest inflation data boosted bets on interest-rate hikes, raising the chances of higher payout on borrowings by data-centre and AI-infrastructure companies with huge debt.
CoreWeave shares fell more than 6 per cent in early trading after tumbling over 15 per cent this week, their worst week in nearly two months.
“A hot inflation print triggered a sharp sell-off in CoreWeave because its business model is a highly indebted play on future data centre demand,” BCA Research analysts said.
“Although the rest of the tech complex is also sensitive to the pace and magnitude of AI adoption and use, it is, on average, considerably less sensitive to interest rates,” they added.
The sell-off is a stark reminder that AI companies’ reliance on debt is becoming a risk for investors, and punctures the notion that companies at the heart of the AI boom are immune to macroeconomic headwinds.
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CoreWeave’s stock has already lost about a fifth of its value, or nearly 9.6 billion, so far in October.
Debt market jitters
The yield on CoreWeave’s October 2031 maturity US dollar bond briefly surged past 16 per cent on Thursday. It is set to decline for a fifth straight week, down about US$0.03 on the dollar this week.
The cost of insuring against CoreWeave’s debt has surged past 1,000 basis points to record highs this week, going by data from S&P Global Market Intelligence.
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Investor worries over CoreWeave’s massive debt load and distressed bond yields had a contagion affect that impacted rival Nebius Group, the shares of which were set for their steepest weekly fall in two months.
Still, several analysts were not ready to throw in the towel. Evercore analysts maintained their outperform rating on CoreWeave stock.
“The markets appear to be extrapolating a higher secondary-market bond yield as evidence the business model has stopped working, which we don’t think is the case,” they wrote in a note.
Others argued the rout in CoreWeave should not be seen as a sign that the AI rally is coming to an end.
“You cannot take CoreWeave as the poster child for AI,” said Tommaso Leodari, chief investment officer at Dubai-based hedge fund Index & Cie. REUTERS