CoreWeave’s bond yields climbed to around 15%, while the cost of insuring its five-year debt against default rose by as much as 74.5 basis points to 1,194.5 basis points, an all-time intraday high, according to Bloomberg. That could mean odds of more than 60% that CoreWeave would default sometime in the next five years. <\/p>\n
CoreWeave has been spending heavily on data centers and Nvidia (NVDA) chips to meet soaring demand for AI computing power. <\/p>\n
The company has secured major contracts with AI developers and technology companies, but building the infrastructure needed to fulfill those agreements requires substantial upfront investment. <\/p>\n
Nvidia CEO Jensen Huang defends CoreWeave <\/p>\n
The Friday, Oct. 16, decline came after CoreWeave stock rebounded the prior day, following comments from Nvidia CEO Jensen Huang that helped ease some concerns. <\/p>\n
“CoreWeave’s strength is improving every day,” Huang said at a Bloomberg<\/a> event in Stockholm. “I’m optimistic. Their cost of capital is actually decreasing.”\u00a0 <\/p>\n Nvidia holds roughly 47.2 million shares of CoreWeave, representing about a 10% stake in the company. CoreWeave is also a major customer of Nvidia’s chips. <\/p>\n However, Huang’s reassurance failed to sustain the rebound. <\/p>\n Peer Nebius (NBIS), another company investing heavily in AI computing infrastructure, dropped about 12% on Oct. 16 and was also headed for weekly losses. Nvidia also invests in Nebius. <\/p>\n Also read: Dell stock price tumbles 6.8% after epic 271% run<\/a> <\/p>\n In August, CoreWeave reported second-quarter results that topped Wall Street expectations. <\/p>\n The company posted an adjusted loss of $1.03 per share, narrower than the $1.20 loss analysts expected. Revenue came in at $2.58 billion, up 112% from a year earlier and above the $2.56 billion estimated by Wall Street. <\/p>\n For the third quarter, CoreWeave guided for revenue of $3.4 billion to $3.6 billion, implying 158% growth at the midpoint. Analysts surveyed had expected $3.43 billion, CNBC reported. <\/p>\n CoreWeave also reported a revenue backlog of more than $100 billion. That means it hasn’t earned that money yet. <\/p>\n Despite the recent sell-off, Cantor Fitzgerald analyst Brett Knoblauch believes investors are focusing too heavily on CoreWeave’s debt and overlooking its improving business fundamentals. <\/p>\n In a research note, Knoblauch said CoreWeave’s debt-yield spike reflects concerns about financing massive AI capital expenditures rather than weakening demand, according to StockTwits<\/a>, citing The Fly. <\/p>\n Also read: Micron stock tumbles despite analyst calls semiconductor sell-off<\/a> <\/p>\n Knoblauch said demand remains strong, with nearly all of CoreWeave’s 2027 capacity already sold and Nvidia providing a backstop for unsold capacity. He also pointed to improving economics, including rising revenue per megawatt and contribution margins, which have shortened the payback period for AI chips to 2-2.5 years. <\/p>\n Knoblauch believes improving unit economics and asset-backed financing can help CoreWeave sustain its rapid growth, despite concerns about borrowing costs. <\/p>\n Cantor Fitzgerald maintained its overweight rating and $176 price target on CoreWeave shares, recommending that investors buy the dip. <\/p>\n CoreWeave stock trades at around $61 as of writing. <\/p>\n Related: Cathie Wood sells $15.8 million of popular semiconductor stock<\/a> <\/p>\n This story was originally published by TheStreet<\/a> on Oct 16, 2026, where it first appeared in the Investing<\/a> section. Add TheStreet as a Preferred Source by clicking here.<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"CoreWeave (CRWV) stock plunged 12% on Oct. 16, putting the AI infrastructure company on track to finish the…\n","protected":false},"author":2,"featured_media":885407,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[5097,28,122,101,939,2993,2994,32455,2995,932,32456,20112,147,9323,1170,1666,6480,2996,2997,923,19533,3733,32457],"class_list":["post-885406","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-401k","tag-business","tag-business-news","tag-economy","tag-finance","tag-financial-information","tag-investing","tag-investment-tools","tag-investor","tag-market-news","tag-mortgage","tag-mutual-funds","tag-personal-finance","tag-quote","tag-real-estate","tag-retirement","tag-stock","tag-stock-research","tag-stock-valuation","tag-stocks","tag-suze-orman","tag-tax","tag-track-portfolio"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/885406","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=885406"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/885406\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/885407"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=885406"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=885406"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=885406"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a> CoreWeave stock is down 15% year to date.Getty Images Analyst recommends buying CoreWeave stock on a dip <\/p>\n