Akamai and CoreWeave Get Upgrades as AI Stocks Sell Off on Debt Worries

what happened

According to Barron's, Goldman Sachs raised its rating on CoreWeave to Buy from Neutral, while Raymond James moved Akamai Technologies to Strong Buy from Outperform. Both calls came days after the shares fell sharply over worries about the debt needed to build data centers.

CoreWeave shares tumbled 25% after the yield on its 9.625% notes climbed. Akamai dropped 18%, erasing about $2.75 billion in market value. On Tuesday the stock rose 2.6% to $89.49, but it is down roughly 16% in October and has lost $8.88 billion in market value since the end of May, according to Dow Jones Market Data.

Raymond James analyst Frank Louthan kept a $170 price target and linked the selloff to Akamai's $5.5 billion capital commitment tied to more than $11 billion in expected revenue from Anthropic. He said the market fears AI firms may struggle to fund their obligations.

why it matters

The upgrades suggest some AI-sector selling may have been overdone, but concerns about debt and funding for data centers remain. Investors will watch borrowing costs for infrastructure providers and whether their contracts hold up under financing pressure.

market impact

AI cloud stocks: upgrades support shares, while debt and funding risks keep pressure on the sector

tags

instruments