CoreWeave Shares Drop 6% After AI Demand Warning

CoreWeave shares declined 6% on Monday following a research note from Bernstein warning that a slowdown in artificial intelligence model training could reduce demand for data centers. The firm highlighted that facilities in rural and Tier 3 markets are particularly vulnerable because they were developed for training workloads that are less sensitive to network latency.

CoreWeave has significant exposure to these markets, with approximately 74% of its contracted power located in Tier 3 and Tier 4 areas. While Bernstein indicated that take-or-pay agreements may mitigate near-term risks for the company's existing backlog, the firm warned that demand for unsold contracted capacity could weaken.

In contrast, Bernstein assigned Outperform ratings to Equinix, Digital Realty Trust, and Csquare. The research firm cited their lower exposure to rural risks due to their concentration in metropolitan markets.