CoreWeave shares fell sharply as investors pushed up yields on its bonds amid rising concern over heavy borrowing for AI infrastructure. The move dragged on wider tech sentiment, with Oracle and Dell also falling.
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01Summary
- 01CoreWeave shares dropped 16% on Wednesday, while the yield on its 9.625% bond due in 2032 rose to 14.8%.
- 02The yield on CoreWeave's 9.75% bond due in 2031 was around 14.9%, with bond yields moving inversely to prices.
- 03Chamath Palihapitiya highlighted CoreWeave's rising yields on X on Tuesday, prompting Elon Musk to reply, "yikes".
- 04Oracle shares fell nearly 7% and Dell dropped 10% as AI debt concerns spread across the tech sector.
- 05The Nasdaq Composite fell 1.4%, while JPMorgan said hyperscalers are on track to spend $800 billion this year and more than $1 trillion annually by 2027.
02Why it matters
The move shows investors are becoming more cautious about the cost and risk of financing the AI boom. It may affect valuations across tech firms that are relying on debt to fund data-centre expansion.
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