CoreWeave Valuation Plummets as Debt Yields Hit 16%
CoreWeave faces a valuation collapse and surging default risk as high interest rates and aggressive capital spending drive unsecured debt yields to 16%.
The valuation of CoreWeave has collapsed from a peak of $90 billion to approximately $34 billion, with its stock price falling nearly 30% in October 2026. The neocloud provider is facing intensifying financial instability, evidenced by unsecured debt yields climbing to 15–16% and a 164% increase in five-year credit default swap spreads over the past year. Swap markets now imply a 60% default probability over five years.
Financial pressure stems from a business model heavily dependent on borrowing to fund AI infrastructure. The company carries approximately $50 billion in total debt, with $10.6 billion requiring refinancing by the end of next year. Because much of this debt is floating-rate, interest rate hikes by the Federal Reserve System to combat inflation have increased debt service costs, which now consume roughly a quarter of the company's revenue. Despite reporting second-quarter revenue of $2.58 billion and a $104 billion backlog, CoreWeave reported a net loss of $626 million for the same period and negative free cash flow of $10.5 billion for the first half of the year.
Market anxiety is further compounded by reports of lower-than-expected revenue from key customer OpenAI and warnings from Gartner regarding AI infrastructure impairments. CEO Mike Intrator issued a memo to employees asserting the company maintains diverse funding options. While some investors questioned if Nvidia Corporation would need to provide a financial backstop, Nvidia CEO Jensen Huang stated that such a move is not necessary.
