CoreWeave's stock and bonds were both hit hard on Wednesday. The yield to maturity on its 9.625% bond due in 2032 reached 14.8%, while its 9.75% bond due in 2031 yielded around 14.9%, according to market data. Bond yields move inversely to prices, meaning bondholders are demanding sharply higher returns to hold CoreWeave's debt.
Investor sentiment has shifted, said Luis Alvarado, co-head of global fixed income strategy at Wells Fargo Investment Institute. "The era of easy money, which we experienced in the first nine months of the year, is starting to disappear and dissipate," Alvarado said. "Now the extra dollar or the marginal dollar is going to be more looked at with a microscope into the concessions that the issuer is giving you back."
The unease spread beyond CoreWeave. Tech investor Chamath Palihapitiya highlighted the soaring yields on X, prompting Tesla and SpaceX CEO Elon Musk to respond, "yikes." Palihapitiya noted the yield had "touched 15%" and closed at a new high, warning that the AI build-out may be creating a private credit bubble, with lenders charging "how little extra lenders appear to charge for AI risk."
Oracle shares tumbled nearly 7%, and yields on its 6.25% bond due in November 2032 rose to 7.24%. Another neocloud stock, Nebius, dropped 9%. The broader tech sector dragged the market down, with the Nasdaq Composite losing 1.4%, and the sell-off hit stocks outside the Magnificent Seven hardest.
The moves underscore growing scrutiny of the massive debt financing behind AI infrastructure projects, as investors begin to question whether the returns will justify the borrowing.