CoreWeave, an AI company that borrows to buy Nvidia GPUs and rents them to Meta, OpenAI and Microsoft, has seen its $1.25 billion junk bond due 2032, issued in June at a 9.625% rate, push its yield above 15% within about four months, reaching distressed levels amid a broader AI bond selloff. Its five-year credit default swap hit a record 1,194.5 basis points last week, implying more than a 60% chance of default within five years, and the company is projected to be cash-flow negative until 2030. The author argues the near-term picture is less dire than the bond market suggests, since cash flow depends on GPU rental prices and demand, which remain strong. The bigger risk, the author says, would be a sharp fall in demand and GPU prices, drawing a parallel with the bandwidth price collapse of the dot-com era that could leave leveraged borrowers in serious trouble.
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Related tickers and likely impact
NVDA
• NeutralNvidia
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/20/2026 | 216.47 |
| Change that session | -0.29% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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