CoreWeave Stock Falls 16% as Bond Yields Near 15% and CEO Calls Market Reaction Irrational

CoreWeave shares plunged more than 16% on Wednesday after a surge in the company's borrowing costs revived deep concerns about the sustainability of its debt-heavy model for funding AI infrastructure. Yields on $1.25 billion of CoreWeave bonds due 2032 touched 15% before closing at a record 14.5%, having risen from an issue rate of 9.625% in June. The selloff was ignited when a chart of the spiking bond yields spread widely on social media, drawing a one-word reply of "Yikes" from Elon Musk the day before.

CEO Mike Intrator pushed back, telling Bloomberg in an internal communication that the market is acting "irrationally" and that he remains confident in the company's outlook. The reassurance did little to calm investors, with options volume in CoreWeave surging to more than seven times its 30-day average as traders piled into bearish positions.

The drop in CoreWeave pulled down other AI infrastructure names. Nebius Group fell as much as 10% and Iren dropped a similar amount, and the broader S&P 500 slipped roughly 1% on the day, compounded by a hotter-than-expected inflation report. Venture capitalist Chamath Palihapitiya added to the pressure by warning that a bubble could be forming in private credit, the financing channel CoreWeave and similar companies have leaned on heavily. CoreWeave lost $626 million in the second quarter, with net interest expenses alone reaching $640 million, underscoring how vulnerable its model is to rising rates.