CoreWeave shares fell more than 20% as of Oct. 16, driven mainly by concerns over debt and spending. The company carries about $35 billion in total debt against $5.5 billion in cash, with net interest payments reaching $640 million in the second quarter alone, unsecured bond yields approaching 15%, and an S&P rating of B+. Capital expenditure was just over $16 billion in the first half of 2026 and could reach $39 billion for the year, roughly triple its $12.4 to $13.2 billion revenue guidance. States are also weighing restrictions on data centers. On the positive side, second-quarter revenue rose 112% year over year and the backlog exceeded $104 billion. The author has reservations and sees the drop as an opportunity only for the most risk-tolerant investors, who might build a position slowly, while the company needs to prove it can convert its backlog efficiently and manage debt.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
CoreWeaveAI investmentdefault riskdata centers
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 10/16/2026 | 214.14 |
| Change that session | -1.42% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- AI credit worries send default insurance costs to record highs
The cost of insuring against tech company defaults hit record highs on October 15 as investors grew worried about the debt financing the AI boom. Heavily indebted data center operators were hit hardest, as hotter-than-expected U.S. inflation and expected rate hikes raised doubts about whether AI investments can earn enough to service borrowing costs. CoreWeave, a loss-making company owing nearly US$50 billion, saw its five-year CDS spreads top 1,100 basis points and its 2031 bond yield reach 16 percent before easing to about 14 percent, while its shares lost nearly a fifth of their value in two days. Oracle's CDS approached 300 basis points, while Amazon, Alphabet and Meta hit record highs but rose more slowly. Anthropic's third-quarter revenue rose 45 percent to $16.8 billion, according to an investor, but did little to ease concerns.
- Big Trouble Brewing Beneath The Surface
The authors say markets turned volatile after a “hot” September CPI report, with sharp selloffs in semiconductors and AI-related stocks over concerns about AI infrastructure spending. CoreWeave, a data-center firm, has taken on over $51 billion of debt to fund expansion; some of its bonds yield above 15%, and its five-year credit default swap briefly spiked above 1,140 basis points before sitting near 1,038, up 16% from last week and 164% from a year ago. CRWV stock fell more than 25% for the week, and major semiconductor ETFs dropped nine straight days for a 17.4% loss. SoftBank reportedly cut its fundraising target from $10 billion to $6 billion, and the IWM small-cap ETF has fallen six consecutive weeks for an 11.6% total loss.
- AI debt concerns drive default insurance costs to record highs
Credit default swap costs for technology companies hit record highs on October 15 as investors grew uneasy about debt financing for AI investment, with heavily indebted data center operators hit hardest. CoreWeave's five-year CDS spread surged past 1,100 basis points, and a 1,000-basis-point spread implies a 64 percent default risk over five years, up from around 30 percent a year ago. Its 2031 bond yield touched 16 percent before easing to around 14 percent, and the company owes nearly US$50 billion. Oracle's CDS approached 300 basis points, while Nvidia, STMicroelectronics and SpaceX also rose sharply. Anthropic's third-quarter revenue rose 45 percent from the previous quarter to $16.8 billion, but this did little to ease concerns, and Deutsche Bank's Jim Reid said AI financing costs are not dramatic overall but show worrying signs at the edges.
- AI boom or bust : Wall Street debates if the latest warnings are another head fake or the real thing
Bears have sounded alarms on AI many times since ChatGPT, but this time the concern is whether trillions in AI spending will pay off, weighing on debt-laden CoreWeave, whose stock fell and credit default swaps surged. Solus strategist Dan Greenhaus says CoreWeave is not a canary signaling an imminent bust, though rising rates could expose the most speculative parts of the buildout. Gartner says AI data center owners need $8.5 trillion in cumulative revenue through 2030 to cover capex, financing and a 12% return, while AI revenue headed to data centers may total only $3.6 trillion at most. Bank of America says the boom follows a classic capital cycle that often ends in disappointment, as competition intensifies and business AI spending has started to dip.
- AI credit fears mount as default protection hits record highs
Default-protection costs for technology companies hit record highs on October 15 as investors grew uneasy about the debt financing the AI investment boom, with heavily indebted data center operators hit hardest. Hotter-than-expected U.S. inflation and expectations of higher rates raised doubts about whether AI spending can generate enough returns to cover mounting borrowing costs. CoreWeave, a loss-making AI cloud company owing nearly US$50 billion, saw its five-year CDS spreads top 1,100 basis points, and its shares lost nearly a fifth of their value in two days. Oracle's CDS neared 300 basis points, while Amazon, Alphabet and Meta also hit record highs but rose more slowly. Anthropic's 45% quarterly revenue jump to $16.8 billion did little to ease fears, and Deutsche Bank's Jim Reid said AI financing costs are not dramatic overall but show worrying signs at the edges.
- AI debt concerns drive default insurance costs to record highs
Related markets
Latest news
- Zinc and lead prices surge, and one stock hits its ceiling price after 14 sessions with almost no trading
TMG shares of Kim loại màu Thái Nguyên (Vimico) rose 15% to VND 74,700 per share on 19/10, their highest level in over 7 months, although only 1,400 shares changed hands after 14 sessions with almost no trading. In Q3/2026, net revenue reached VND 443 billion (up 69%) and after-tax profit reached VND 67 billion, four times the year-earlier level, driven by higher prices for zinc ingots, lead concentrate and sulfuric acid. For the first nine months, after-tax profit reached VND 149 billion (up 187%), while total financial debt fell from VND 83 billion to VND 44 billion. TMG will pay a 2026 interim cash dividend at 30% (VND 3,000 per share), with a last registration date of 22/10/2026 and total payments of about VND 54 billion expected on 30/10/2026. Vimico holds 51% of charter capital and is expected to receive about VND 27.54 billion.
- More than US$1 billion set to flow into stocks: has the time to deploy arrived?
BSC (BIDV Securities) maintains that valuations across many sectors have become more attractive, making now a reasonable time to allocate to stocks for the medium to long term. Market-wide profits rose 50% year on year in Q2 2026, and BSC raised its 2026 profit growth forecast to 26% and expects 12% growth in 2027. The VN-Index's trailing 12-month P/E, excluding the Vingroup group, is 10.5x, while the 2027 forward P/E is about 9.5x, a discount of nearly 30% to the average. Liquidity remains the main bottleneck, though banking-system liquidity pressure has begun to ease and the probability of rate cuts in 2027 has risen. Foreign outflows are expected to ease, with about VND 33,000 billion (US$1.27 billion) of inflows from the market upgrade expected mainly in 2027.
- One securities firm's Q3 profit unexpectedly 'evaporates' by 98% year on year
CTCP Chứng khoán DSC (DSC) reported Q3/2026 operating revenue of nearly VND 161 billion, down 38%, leaving pre-tax profit at just VND 4.2 billion, down 98%. The main cause was proprietary trading: gains from selling FVTPL financial assets dropped over 99% to about VND 604 million, while revaluation losses reached VND 55 billion. Operating expenses rose 93% to VND 75 billion, and financial expenses climbed 67% to VND 69 billion, all of which was interest expense, while brokerage revenue fell 64% to VND 15 billion. For the first nine months, pre-tax profit reached VND 97 billion, down nearly 67%.
- Securities companies' update as of morning 20/10: Q3 financial reports pour in, and several major names unexpectedly report profit declines
As of the morning of 20/10, 31 securities companies had released their Q3/2026 financial statements with mixed results, and some saw profits drop 80-98% year on year. VIX reported Q3 pre-tax profit of about VND 192 billion, down 94%, as gains from selling FVTPL assets fell sharply, revaluation losses reached nearly VND 1,363 billion, and operating expenses rose to over VND 1,744 billion. BVSC's pre-tax profit was about VND 20 billion, down 80%, while ABS rose 552% to VND 376 billion, driven by FVTPL gains of nearly VND 412 billion. KIS edged up 2% to VND 248 billion on lower costs, while BMS and AIS swung to losses of over VND 63 billion and about VND 3 billion, respectively.
- Securities firm names 2 companies directly benefiting from proposed fertilizer export tax cut
MBS views the Ministry of Finance's proposal to cut export tariffs on urea, superphosphate and sulphate of potash (SOP) from 5% to 0% as a positive factor for the fertilizer sector, though the effective date has not yet been set. Đạm Cà Mau (DCM) is seen as the biggest beneficiary, with estimated savings of about VND 203 billion per year (9.2% of 2025 pre-tax profit), as urea accounted for about 59.7% of its sales volume in the first eight months of 2026. Đạm Phú Mỹ (DPM) is estimated to save about VND 93 billion per year (6.9%), a smaller benefit than DCM. LAS's benefit is limited, DDV does not benefit directly, and BFC could face cost pressure if domestic urea prices rise.
- Why Palantir Technologies Stock Rallied Today
Palantir Technologies (PLTR) shares rose sharply on Monday morning, reaching as much as 5.9% and still up 5.5% as of 12:19 p.m. ET. The catalyst was a new partnership with Knox Systems, a managed federal and Department of Defense cloud provider, which aims to help customers gain FedRAMP acceptance faster and deploy Palantir's data and AI platform in secure government environments. The article notes that concerns about AI adoption had weighed on the stock, which trades at 83 times next year's expected earnings. However, given Palantir's triple-digit profit growth, its PEG ratio is 0.5.
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.