CoreWeave shares tumble as bond yields near 15% on concern about AI borrowing binge
Shares of CoreWeave sank 15%, while yields in its bonds blew out further.
TL;DR
- CoreWeave's shares fell 15.5%, and its bond yields surged, with some reaching nearly 15%.
- Investor concerns are growing about the high debt loads taken on by tech companies for AI build-outs.
- CEO Mike Intrator dismissed the market reaction, stating the company is confident in its backlog to cover debt.
- Market experts noted a shift in investor sentiment, with a demand for more risk compensation.
- Oracle also saw its shares drop and bond yields increase amid similar concerns.
- The broader tech sector, particularly stocks outside the 'Magnificent Seven,' is feeling the impact of these debt concerns.
- Hyperscalers are significantly increasing their bond issuances to finance AI infrastructure spending, which is projected to exceed $1 trillion annually by 2027.