CoreWeave credit default swaps hit distress levels as investors sour on AI debt

Jonathan Raa | Nurphoto | Getty ImagesCoreWeave's credit stress continued to spiral on Thursday amid a broader sell-off in AI-related names. CoreWeave — a so-called neocloud company — has taken on more than $51 billion of debt and obligations to finance its AI infrastructure buildout. It's now facing a rebellion from stock and bond investors as concerns mount about AI overspending and debt levels.Yields on CoreWeave debt have continued to climb, with the yield to maturity on its 9.75% bond due in 2031 reaching 15.78%. Bond yields move inversely to prices. Meanwhile, the spread on its five-year credit default swaps, which are insurance against default, at one point soared above 1,140 basis points. It last stood at 1,088 bps — a 33% week-over-week jump and 177% higher than a year ago. Coreweave's 5-year credit default swap spreadCredit concerns are spreading into AI equities too. CoreWeave's stock was down again Thursday, adding to Wednesday's 15.5% nosedive. Other neocloud stocks were under similar pressure. Nebius was down 5% and Iren sank 8% in Thursday trading. Anxiety about AI overspending is also spreading. For instance, shares of Micron Technology and Advanced Micro Devices sh...