CoreWeave sinks 25% as AI trade unwinds, debt yield tops 16%

The week's selling was concentrated in companies tied to AI infrastructure. CoreWeave, which has been building out data centers at a rapid pace, saw its debt yield spike above 16% on Thursday. That move reflected broader anxiety about the cost of financing such expansion, especially as inflation has revived rate-hike expectations. Nvidia CEO Jensen Huang briefly lifted the stock on Thursday by telling Bloomberg he was optimistic about the company. Cantor Fitzgerald analyst Brett Knoblauch also defended it, reiterating an Overweight rating and $176 price target and arguing that the market is getting it wrong.

Memory stocks suffered a separate blow. SK Hynix, SanDisk and Micron all fell sharply after China's ChangXin Memory Technologies announced a breakthrough in 4F² DRAM architecture on October 13 and said it plans to launch a new data center chip design by year-end. Concerns over a potential strike at a key Micron manufacturing facility added further pressure. UBS analyst Nicolas Gaudois said the correction has created an attractive entry point, maintaining Buy ratings across their coverage.

Tesla also drew attention. It unveiled its long-awaited second-generation Roadster at SpaceX's McGregor, Texas facility on Thursday night, but the stock reversed early gains and was on course to end the week around 7.8% lower. JPMorgan analyst Rajat Gupta reiterated a Neutral rating and $415 price target, noting the two-seat vehicle incorporates cold-gas thrusters, an advanced underbody suction system and active aerodynamics.