CoreWeave stock dropped by more than 15% on Wednesday, reaching a price of $65.93. The decline occurred shortly after Jim Cramer publicly endorsed the company as the only firm in the neocloud sector he trusts. The market movement followed a significant sell-off in the company's bonds, which saw yields hit a record 14.5% on Tuesday.
The company's financial data shows total debt reached approximately $52 billion by June, exceeding its market capitalization of roughly $37 billion. Interest expenses for the April-to-June quarter rose to $640 million, compared to $267 million in the same period last year. Despite revenue more than doubling to $2.58 billion, the firm reported a loss of $626 million.
Investor concerns regarding the financing of AI infrastructure have impacted the broader sector. Yields on $1.25 billion of CoreWeave bonds due in 2032 climbed from 9.625% at issuance in June to 14.5%. Other companies in the space also saw declines, with Nebius falling 10% and Oracle dropping 7% during the same trading session.
Wall Street sentiment remains mixed regarding the stock's future. While up to 20 out of 27 analysts maintain a Buy rating with an average price target of $143.96, the current trading price of approximately $66 sits below the lowest analyst target of $74. Analyst Gil Luria has cautioned that the equity value could potentially reach zero if AI spending trends shift.
