CoreWeave shares and bonds set for weekly slump on rate-hike fears

what happened

CoreWeave's shares and bonds were heading for sharp weekly losses on Friday as investors grew wary of the cloud provider's $50 billion debt load, a concern that has spread across the AI sector. The trigger was the latest inflation report, which increased bets on interest-rate hikes and therefore the risk of higher interest costs for data center and AI infrastructure companies carrying heavy debt.

CoreWeave shares fell more than 5% in premarket trading after dropping over 15% during the week, their worst week in nearly two months. The October 2031 dollar bond yield briefly rose above 16% on Thursday, and the cost of insuring the company's debt climbed past 1,000 basis points to record highs, according to S&P Global Market Intelligence. Rival Nebius Group was also hit, with its shares on track for their steepest weekly decline in two months.

Some analysts remained more measured. Evercore kept its outperform rating on CoreWeave stock, and Tommaso Leodari, chief investment officer at Dubai-based Index & Cie, said CoreWeave cannot be taken as the poster child for AI.

why it matters

The selloff shows that reliance on debt is becoming a risk for AI companies, since higher rates raise financing costs for the firms most dependent on borrowing. For markets, it is a reminder to watch credit spreads and interest-rate expectations alongside tech earnings.

market impact

AI infrastructure stocks and high-yield AI debt: pressure from expectations of higher interest rates

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