CoreWeave appears to have a lender problem, not a customer one

· The Fresno Bee

CoreWeave Inc. (CRWV) is heading into its next earnings report with more demand than it can serve. Its lenders are starting to treat it as a much riskier bet.

CoreWeave rents out Nvidia Corp. (NVDA) chips to companies building AI tools. On its Aug. 11 earnings call, Chief Executive Mike Intrator said near-term capacity remained effectively sold out. Chief Financial Officer Nitin Agrawal added that CoreWeave raised prices about 25% in July.

Also read: CoreWeave CEO responds as worry over spending bill comes due

The strain sits on the other side of the ledger. CoreWeave’s 9.75% bonds due in 2031 yielded 15.78% on Oct. 15, according to CNBC. Investors now want far more interest than CoreWeave promised.

Demand is not what is hurting CoreWeave

Revenue jumped 112% to $2.6 billion in the second quarter, according to CoreWeave’s earnings release. Its backlog of signed but undelivered contracts reached about $104 billion, the company said.

Answering Deutsche Bank analyst Brad Zelnick, Intrator said many clients now make money from their own products. Those clients are “willing to pay us higher margins because they need access to the compute,” he said.

I find it hard to call that a customer problem. CoreWeave added more than $25 billion in new customer commitments early in the third quarter, the company said. Prices rose in that same stretch.

The bill shows up in interest. Second-quarter interest expense was $640 million, the company reported. Adjusted operating income, the profit from running the business, was just $128 million, it said.

Management’s guidance shows that dollar gap widening. It expects third-quarter interest expense of $860 million to $950 million. It expects adjusted operating income of only $200 million to $260 million.

CoreWeave, in short, is charging customers more, yet interest still costs several times what the business earns.

Bloomberg / Getty Images

Bond investors now want far more from CoreWeave

CoreWeave pays for new capacity up front with debt, customer prepayments, and other capital, Agrawal said. Revenue arrives only after delivery. In August, he said its average cost of debt had fallen almost 3 percentage points in a year.

Lately, the stock has swung amid broader market weakness, according to a Bank of America research note shared with TheStreet. The note links this partly to widening bond yields and financing costs across AI infrastructure.

“CoreWeave was a little bit of the poster child,” Janus Henderson credit head John Lloyd told CNBC. He meant borrowers that must refinance at higher rates. His firm’s income fund owns CoreWeave’s 2031 bonds.

Income funds are built for savers seeking steady payouts, so CoreWeave’s credit risk can reach everyday investors. The fear has spread to rival Nebius Group (NBIS).

What worries me is not the size of the debt. It is that new money keeps getting pricier just as the company needs more of it.

More CoreWeave:

CoreWeave hits a new low, yet analysts still say buy

CoreWeave stock fell about 10% on Oct. 22, setting a new 52-week low, StockAnalysis data shows. The 52-week range runs from $53.50 to $141.79.

Debt is on track to outweigh the stock. CoreWeave’s market value is about $31 billion, according to StockAnalysis. Bank of America estimates its debt will reach about $42.5 billion by year-end.

StockAnalysis still shows a consensus Buy rating from 41 analysts, with an average price target of $140.58.

Recent calls show a wide split:

  • Buy, $105 target, cut from $120: Karl Keirstead, UBS, Oct. 23
  • Buy, $140 target: Tal Liani, Bank of America, Oct. 22
  • Sell, $39 target: Abhishek Shukla, HSBC, Oct. 19

Bank of America’s target tops this group, which makes its funding warning hard to ignore.

Bank of America’s Buy call comes with a funding warning

Analyst Tal Liani kept his Buy rating in the note titled “3Q26 Preview: capacity deployment and funding strategy in focus.” He estimates third-quarter revenue of $3.66 billion, up 168% from a year earlier.

“Funding needs and capex remain in focus,” Liani wrote, estimating that CoreWeave needs another $20 billion to cover its contracted backlog. His estimates show operating profit covering only about a third of this year’s interest costs.

The $140 target values CoreWeave at 26 times Liani’s 2027 operating profit estimate, using a measure that counts debt. Cloud data center peers trade at 14 to 19 times, according to the note. That target dates to May 5, before October’s jump in borrowing costs.

Bank of America has done investment banking work for CoreWeave, the note disclosed. Liani wants funding details on the early November call, including debt versus new stock. What I’ll be listening for is a funding plan with numbers, not another backlog figure.

The first wave of AI building leaned on tech giants with strong balance sheets. CoreWeave tests whether a heavily borrowed company can carry the next wave, and lenders, not customers, now set the pace.

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This story was originally published October 23, 2026 at 12:33 PM.