CoreWeave Stock Falls 6% Premarket as Debt Concerns Intensify

CoreWeave (NASDAQ: CRWV) shares fell another 6.31% to approximately $61.63 in Thursday premarket trading, extending a sharp selloff as concerns over the AI cloud provider’s debt intensified despite management’s reassurances about its contracted business.

The stock closed Wednesday at $65.78, down 15.46%. By early Thursday, CoreWeave’s unsecured bonds due in 2032 were trading around 78 cents on the dollar, yielding just over 16% on Tradeweb, Reuters reported. The company’s five-year credit-default-swap spreads also exceeded 1,000 basis points, according to S&P and LSEG data, signaling heightened concern about its creditworthiness.

The decline in bond prices indicates that buyers are demanding substantially higher returns to hold CoreWeave’s debt. Although the pricing suggests investors see a higher risk of default, it does not mean the company will fail to meet its debt obligations.

Separately, CoreWeave Tokenized bStocks (CRWVB), a tokenized instrument linked to the company’s shares, was quoted at $61.58 earlier Thursday, down approximately 19% over 24 hours. Unlike Nasdaq-listed shares, CRWVB trades around the clock, so its rolling 24-hour decline cannot be directly compared to CRWV’s regular-session or premarket performance.

CoreWeave CEO Defends $104 Billion Backlog Amid Market Scrutiny

Amid the selloff, CoreWeave Chief Executive Mike Intrator sought to reassure employees in a Wednesday memo, arguing that financial markets can sometimes misunderstand a company’s business and act irrationally.

According to Reuters, Intrator said in a memo that CoreWeave’s contracted business backlog was sufficient to cover its debt obligations. He also expressed confidence in the company’s business model, customers and ability to deliver on its commitments.

The CEO pointed to difficulties and delays involving attempted initial public offerings (IPOs) and debt financing at competing AI infrastructure companies. He said those problems were “bleeding into the narrative around CoreWeave,” suggesting that setbacks elsewhere in the sector were affecting perceptions of his company.

CoreWeave reported a revenue backlog of $104.2 billion at the end of the second quarter, up from $99.4 billion three months earlier. The company also disclosed more than $25 billion in additional net customer commitments secured early in the third quarter, which were not included in the June backlog. 

Those commitments represent revenue expected from contracted computing services, but they are not cash already collected. CoreWeave must provide the computing capacity and meet its contractual service obligations to recognize that revenue. The company also incurs substantial infrastructure and operating costs to fulfill those contracts.

Bond Selloff Puts CoreWeave’s Financing Costs in Focus

The credit-market concerns center on CoreWeave’s reliance on borrowed money to fund its expanding network of AI data centers and computing equipment.

In June, CoreWeave issued $1.25 billion in senior unsecured notes with a fixed annual interest rate of 9.625% and a maturity date in July 2032. The bonds’ subsequent decline in market value has pushed their yield significantly above the original coupon rate. 

The higher market yield does not increase the fixed interest payments on those outstanding notes. However, it could increase the cost of future debt issuance or refinancing.

The underlying financial exposure is substantial. As of June 30, CoreWeave had approximately $35.1 billion in recourse and non-recourse debt, along with $16.5 billion in operating and finance lease liabilities. Together, those obligations totaled roughly $51.6 billion. 

Financing costs have also increased. CoreWeave reported $640 million in net interest expense for the second quarter, up from $267 million in the same period a year earlier. That expense was equivalent to nearly 25% of its $2.58 billion quarterly revenue, while the company recorded a $626 million net loss.

The gap between operating cash generation and infrastructure spending adds another dimension to the financing concerns. CoreWeave generated $679 million in operating cash flow during the quarter but paid $6.42 billion for property and equipment, including capitalized internal-use software.