Shares of several technology companies, including Oracle Corp. and DigitalOcean Inc., fell today following concerns over the financial obligations of cloud provider CoreWeave Holdings Inc. The market reaction was triggered by a viral discussion on X regarding the company's debt, which reportedly totals $50 billion.
Venture capitalist Chamath Palihapitiya highlighted a batch of CoreWeave bonds worth $1.25 billion, noting that their yield briefly exceeded 15%. This spike in yield, which typically signals a decline in bond prices, prompted public concern. CoreWeave shares subsequently dropped by more than 15.5%.
The selloff extended to other neocloud providers, with DigitalOcean, TeraWulf Inc., and Hut 8 Corp. seeing their share prices decline by over 10%. Oracle Corp. shares closed 8.8% lower, while suppliers Dell Technologies Inc. and Advanced Micro Devices Inc. fell 11.3% and 5.73% respectively.
CoreWeave CEO Mike Intrator addressed the situation in a memo to employees, stating that the company remains confident in its financial position. He noted that the firm's backlog, representing expected revenue from cloud contracts with partners like Microsoft, Meta, and OpenAI, reached $104 billion in June.
