CoreWeave Falls 7% Premarket as Bond-Yield Surge Fuels Debt Concerns
CoreWeave (NASDAQ: CRWV) shares fell nearly 7% before the opening bell Wednesday as reports of bond yields approaching 15% sharpened scrutiny of the financing behind the AI cloud provider’s expansion.
The stock is changing hands below $72 as of publication, extending Tuesday’s 3.05% decline to $77.81. The debt selloff drew wider attention after venture capitalist Chamath Palihapitiya circulated a chart showing the yield on CoreWeave’s $1.25 billion of bonds due in 2032 touching 15% on Tuesday before ending at 14.5%, described as a new closing high.
The Financial Times separately reported Wednesday that CoreWeave’s unsecured bonds had sold off to yield almost 15%, underscoring concerns about the company’s borrowing needs as it builds computing capacity for AI customers.
CoreWeave issued the dollar-denominated 2032 notes in June with a fixed annual coupon of 9.625%, according to a securities filing. The notes mature on July 15, 2032. A secondary-market yield near 15% reflects a lower trading price and a higher return demanded by buyers; it does not reset the coupon on the existing debt. Persistent weakness could, however, make future borrowing or refinancing more expensive.
That distinction matters for a company whose financing costs are already rising sharply. CoreWeave reported second-quarter net interest expense of $640 million, up from $267 million a year earlier and equivalent to roughly a quarter of revenue. Revenue more than doubled to $2.575 billion, while its net loss widened to $626 million from $290 million.
CoreWeave rents access to computing infrastructure built around Nvidia chips, placing it among the companies spending heavily to meet demand from AI developers. The Financial Times reported that it is seeking greater access to insurers’ capital by obtaining investment-grade ratings for more of its chip-backed debt and eventually for the company itself. Its debt and lease obligations totaled about $52 billion at the end of June, the newspaper reported.
The company’s contracted business provides a counterweight to the financing concerns. CoreWeave reported approximately $104 billion in revenue backlog at June 30, excluding more than $25 billion of additional customer commitments secured early in the third quarter. But that backlog represents future revenue subject to delivery and service-availability requirements, leaving the company with infrastructure to finance before all of those sales can be recognized.
