CoreWeave Sell-Off Highlights Debt Risks in AI Infrastructure

CoreWeave (CRWV) shares dropped more than 15% in one day in mid-October and nearly 25% over the week, as investors questioned the AI cloud provider’s debt-funded expansion. The company reported $35.6 billion in indebtedness as of June 30, while broader estimates put its debt exposure at about $50 billion. Its 2030–2032 bond yields climbed to roughly 15%–16%, and credit-default-swap spreads exceeded 1,000 basis points, signalling rising concern about credit risk and refinancing costs. Higher market yields do not immediately increase payments on existing fixed-rate debt, but could make future borrowing more expensive. CoreWeave also expects capital spending of $35 billion to $39 billion in 2026. The company reported $5.1 billion in 2025 revenue and a $1.2 billion net loss. Analysts expect about $13 billion in 2026 revenue but see losses continuing. CEO Mike Intrator cited a backlog exceeding $104 billion, which points to contracted demand but is not cash on hand and must be fulfilled over time. Nvidia owns about 10% of CoreWeave and has a capacity agreement with the company through April 2032. Short sellers made an estimated $806 million on October 14, when CRWV fell 15.5%, although buyers remained active: ARK Invest bought more than 381,000 shares, and retail investors purchased about $66 million worth during the week. The sell-off also weighed on AI infrastructure peers Nebius (NBIS) and Applied Digital (APLD). Wall Street views remain divided, with some investors citing demand and backlog as reasons to buy, while others warn that debt costs and execution risks could undermine returns from the AI infrastructure buildout.