CoreWeave (CRWV) shares fell about 20% in the week to 19 October 2026 as rising bond yields heightened concerns about its debt-funded growth. JPMorgan argues the business model remains fundamentally sound, and that concerns about rising debt and heavy cash burn may be exaggerated, since financing needs reflect rapid expansion. A typical five-year contract is estimated to generate an unlevered IRR in the mid-teens, comfortably above the blended cost of capital of 9% to 11%, and after repaying debt, CoreWeave could retain cash equal to about 16% of the contract value. Existing operations may not fund expansion until 2030, while contribution margins on Q2 2026 contracts are expected to be 5-10 percentage points higher than recently signed ones. CoreWeave raised its 2026 year-end ARR target to $18.5 billion-$19.5 billion and full-year revenue guidance to $12.4 billion-$13.2 billion from $12 billion-$13 billion.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
CoreWeavebondsartificial intelligenceETF
Open a keyword to see other news on the same topic.
Related tickers and likely impact
NVDA
• NeutralNvidia
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/19/2026 | 217.09 |
| Change that session | +1.38% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- AI Cloud Stocks Rise as Musk Calls Overcapacity Talk 'Ridiculous': Nebius and CoreWeave Gain 3%, Oracle Edges Higher
AI cloud stocks rebounded from last week's selloff, with Nebius up 3% to $176.60, CoreWeave up 3% to $63.77 and Oracle up 1%. On SpaceX's Q3 2026 earnings call, Elon Musk called overcapacity talk 'ridiculous' and said hyperscalers keep asking to rent more compute, reversing the tone of his 'Yikes' post on X the week before, which followed rising yields on CoreWeave's bonds. Nebius said it could sell all of next year's planned capacity at current prices and has $37.5 billion in remaining performance obligations, though it faces customer concentration and heavy infrastructure spending. The article suggests financing, especially CoreWeave's reliance on debt, will decide the next move, and that these shares remain volatile.
- The All-In Hosts Asked If the AI Trade Is Cracking. Here’s What Income Investors Should Do
The All-In hosts asked whether the AI trade is breaking as CoreWeave’s stock sold off, with its bonds marked down to 80%. CoreWeave borrows heavily to expand its GPU capacity: second-quarter revenue rose 112.3% to $2.575 billion, but free cash flow was -$5.74 billion and interest expense climbed to $640 million from $267 million a year earlier. Its 2032 bonds yielded 15% versus 5.09% for the 10-year Treasury, while the bulls argue demand remains massive and operating cash flow turned positive at $679 million. The article also points to Procter & Gamble and ADP as income-investor examples, both with yields below the 5.09% Treasury.
- CoreWeave's crash looks like 2008. Here's why it isn't.
This podcast examines the recent selloff in chip and AI stocks after CoreWeave's bond yield reached 15%, equivalent to about $640 million in interest this quarter. The chain began with a chart posted by Chamath Palihapatia and a reply from Elon Musk, and CoreWeave fell 15% within 24 hours while around $1.6 trillion was wiped out of chip and AI stocks. The host finds it puzzling that CoreWeave reported 112% revenue growth and a $129 billion backlog, and that TSMC, Dell and Oracle posted record quarters yet their shares still fell. Semiconductor stocks had eight straight losing days, the longest losing streak since 2008.
- AI jitters clobber South Korea's Elice as stock sinks 32% in trading debut
Shares of South Korean data center provider Elice (0158S0.KQ) plunged 32% on their first trading day. Elice, which rents out AI compute capacity, raised about $151 million, with demand oversubscribing the IPO roughly 400 times. The sharp drop reflected investor worries about valuations and long-term profitability, especially if hyperscalers cut spending or borrowing costs rise further. The sell-off also tied into concerns about neocloud providers, after a viral chart of rising bond yields at Nvidia-backed CoreWeave (CRWV) highlighted its debt-heavy balance sheet; CoreWeave rebounded Tuesday after a 25% drop last week. HSBC analyst Abhishek Shukla set a $39 price target on CoreWeave, about 34% below current trading levels.
- Stock investors are ready to move on from the AI rout. Credit investors are not
AI stocks rallied on Monday and the Nasdaq Composite gained 1%, but CoreWeave closed slightly lower and hit a 52-week low as investors remained concerned about its debt. CoreWeave’s 9.625% bond due 2032 had a 14.9% yield to maturity, and its five-year credit default swap (CDS) spread stood at about 1,082 basis points, above the 1,000 level generally seen as a sign of distress. Oracle’s five-year CDS spread widened to 315 basis points, up 311% from a year earlier, even as its shares rose 1% after a 9% drop last week. Goldman Sachs said dispersion is widening across AI-related high-yield bonds, with neoclouds and firms with significant frontier lab exposure at the center of funding-cost concerns. Economist David Rosenberg called Oracle the “canary in the coal mine,” citing its roughly $132 billion of net debt and BBB- rating, and said a downgrade to junk would be the clearest sign of contagion.
- Credit stress is threatening to unwind the AI bull. All eyes are on Oracle to hold the line
Oracle's bonds are sitting close to junk territory as markets cool on AI after CoreWeave's slump, and a credit downgrade could have cascading effects across AI financing. Its five-year credit default swap spread stood at 295 basis points, up 287% in one year, a level more in line with high-yield credits, while S&P rates Oracle BBB-, the lowest investment-grade level. The company has issued $118 billion in long-term debt to fund its buildout, and analysts estimate free cash flow of -$23.7 billion this year and -$36 billion in 2027. Deutsche Bank warns that a junk downgrade could force IG-only investors into sales, though Vanguard's Brad Collins says he would not extrapolate high-yield stress to investment grade.
Related markets
Latest news
- Optics Stocks Tumble as Tech Selloff Deepens Ahead of Earnings: Coherent Tumbles 12%, Applied Optoelectronics Drops 10%, Lumentum Falls 9%
Optical networking stocks that drove the AI data-center rally fell sharply as a broader tech selloff deepened ahead of earnings. Coherent (COHR) traded at $209.82, down 12%, Applied Optoelectronics (AAOI) fell 10% to $69.30, and Lumentum (LITE) dropped 9% to $770.53. The Roundhill Photonics & Optics ETF (LYTE) lost 10%, while the Invesco QQQ Trust (QQQ) fell only 2%, suggesting group-wide caution. The article notes these shares still sit higher for the year, and Lumentum's CEO said its data center optical components are sold out for years. Quarterly reports from the three companies arriving in coming weeks will show whether capacity can keep pace with demand.
- Does SpaceX’s $8 Billion Spectrum Deal Mean Verizon’s Q3 Earnings Don’t Really Matter?
Verizon reports third-quarter results on October 26, days after SpaceX announced a roughly $8 billion deal for nationwide 800 MHz spectrum, which the author says makes the report more important. Last quarter, Verizon beat with adjusted EPS of $1.30 against a $1.27 consensus, while revenue fell 0.7% to $34.25 billion as equipment revenue dropped nearly 20% on a deliberate pullback on subsidies. The core business improved, with 184,000 postpaid phone net adds, churn at 0.92%, and a record 40.1% adjusted EBITDA margin, and full-year adjusted EPS guidance was raised to $4.99 to $5.04. The author will watch whether service revenue growth nears 3% in Q3 and about 4% in Q4, and whether consumer postpaid phone churn of 84 basis points holds as SpaceX's service is expected to start in early 2028 after the deal closes in the first half of 2027.
- Altimeter’s Gerstner: Scale wins superintelligence race as SpaceX plans $400B compute buildout
Altimeter Capital CEO Brad Gerstner says whoever has the most scale, capital, compute and data will win the race to superintelligence, as SpaceX (NASDAQ:SPCX) closed at $159.31 on October 21, up 7.79%, after reporting third-quarter revenue of $14.60 billion. He says Elon Musk plans 10 GW of computing power next year, about 25% of U.S. capacity additions and roughly $400 billion of capital, with SpaceX now installing 200,000 GB300 chips a month. Gerstner sees a possible merger with Tesla (NASDAQ:TSLA) mainly as a way to finance that spending, and he argues that lenders value standard NVIDIA GPUs more easily than custom chips, giving NVIDIA pricing power when credit is tight. The article warns that SPCX shareholders bear spending, depreciation and execution risks at a $2.10 trillion market cap.
- Bloom Energy Sinks 9% as Pre-Earnings Rally Reverses; FuelCell Drops 6%, Plug Power Falls 3%
Bloom Energy (NYSE:BE) shares fell 9% to $218.09 in afternoon trading, giving back their October 21 gain as caution builds ahead of its third-quarter 2026 report. FuelCell Energy (NASDAQ:FCEL) dropped 6% to $12.36 and Plug Power (NASDAQ:PLUG) fell 3% to $1.37, with the Global X Hydrogen ETF (NASDAQ:HYDR) down 4% and SPDR S&P 500 ETF Trust (NYSEARCA:SPY) off 1%. The article links the size of each drop to how heavily each company depends on data center demand, since Bloom Energy sells fuel cell systems for on-site data center power while FuelCell builds utility-scale plants and Plug Power focuses on hydrogen for warehouse and industrial users. After a large run this year, Bloom Energy's expectations are elevated, and its report will show whether margins keep pace with data center demand.
- Could a Tesla-SpaceX merger really be the next big move for Elon Musk?
Two speakers discuss a possible Tesla-SpaceX merger and the outlook for Tesla stock. Speaker A argues that SpaceX, which he calls a vertically integrated AI company, would make a powerful combination, and says he will keep focusing on Tesla's Megapack business, which is sold out in utility-grade battery storage, as well as Optimus. He says he bought in at about $100 a share three years ago and sees volatility as a friend given his long-term perspective. Speaker B views Tesla's recent results as mixed to negative, with profit down over 40%, flat revenue, and better free cash flow mainly because capital spending was cut. He says Tesla is behind Waymo in autonomous driving (800 versus 8,000) and behind China in humanoid robots, and suggests a merger could be interesting and might benefit Tesla shareholders.
- Behind Vingroup's appeal: The lead bird driving Vietnam's stock market
Vingroup (VIC) shares rose more than 11% over two consecutive sessions, adding over 40 points to the VN-Index, while the Vingroup group (VIC, VHM, VPL, VRE) contributed 54 points, or 80% of the index's gain over those two sessions. On October 22 alone, foreign investors net bought VND 240 billion of VIC, the largest on the exchange, and VND 160 billion of VHM. This inflow follows FTSE Russell's upgrade of Vietnam to secondary emerging market status from September 21, with emerging-market ETFs potentially investing over USD 2 billion through September 2027, nearly USD 1 billion of which could go to VIC and VHM. The article also cites private-sector growth prospects, the government's goal of double-digit GDP growth for 2026–2030, and State Bank of Vietnam measures to lower lending and deposit rates as supportive factors for large conglomerates like Vingroup.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.