CoreWeave sell-off over $35 billion debt cost, not AI demand

CoreWeave's stock move this week looks less like a verdict on AI demand than a repricing of the cost of financing that demand. The company carries roughly $35 billion of debt and substantial lease liabilities, and unsecured bond yields approaching 15% raise questions about the economics of future growth. Bernstein argues the market is finally assigning a higher risk premium to those financing needs, and it maintained an underperform rating, calling the long-term business model economically challenged despite strong demand trends.

Other banks read the same facts differently. J.P. Morgan said demand for AI infrastructure has strengthened rather than weakened, noting that most of CoreWeave's capacity is backed by long-term take-or-pay contracts and that project-level returns remain above its cost of capital even after funding costs rose. BofA Securities reiterated a buy rating, citing more than $129 billion in contracted backlog and a customer mix it says has broadened over the past 18 months beyond Meta and OpenAI to include Microsoft, Jane Street, Mistral and others. The divide leaves the stock's direction tied to how investors weigh those contracts against the cost of the debt behind them.