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“CoreWeave is considered one of the riskiest stocks in the AI trade because of its heavy reliance on high-yield debt to finance its data centers. The company secured investment-grade ratings for its chip-backed debt for the first time in March and the goal is to keep winning similar ratings, co-founder Brannin McBee told the Financial Times on Wednesday, which just underscores how much more CoreWeave plans to borrow.
The company’s close relationship with Nvidia could provide a source of capital if its market access tightens, according to Bloomberg Intelligence analyst Robert Schiffman. But Huang pushed back against that idea on Thursday, saying there’s no need for a bailout.
“CoreWeave’s strength is improving every day,” Huang told Bloomberg at an event in Stockholm. “I’m optimistic. Their cost of capital is actually decreasing.”
Still, even with all the risks posed by higher interest rates and the stratospheric level of AI spending, the fundamental backdrop remains encouraging for AI companies, according to Matt Bartolini, global head of research strategists for State Street Investment Management.
“We’re still very early on in the AI capex cycle, so I don’t think rates will be the barrier that’s hard to jump over, but it does change the calculus behind the continued issuance of debt, and ensuring whether the financing of that debt can be met with credible growth in the future,” Bartolini said. “The secular demand story is what’s funding the capex cycle, and I think demand is likely to continue irrespective of what’s happening with rates.”“
Source: https://www.taipeitimes.com/News/biz/archives/2026/10/18/2003866187
The company’s close relationship with Nvidia could provide a source of capital if its market access tightens, according to Bloomberg Intelligence analyst Robert Schiffman. But Huang pushed back against that idea on Thursday, saying there’s no need for a bailout.
“CoreWeave’s strength is improving every day,” Huang told Bloomberg at an event in Stockholm. “I’m optimistic. Their cost of capital is actually decreasing.”
Still, even with all the risks posed by higher interest rates and the stratospheric level of AI spending, the fundamental backdrop remains encouraging for AI companies, according to Matt Bartolini, global head of research strategists for State Street Investment Management.
“We’re still very early on in the AI capex cycle, so I don’t think rates will be the barrier that’s hard to jump over, but it does change the calculus behind the continued issuance of debt, and ensuring whether the financing of that debt can be met with credible growth in the future,” Bartolini said. “The secular demand story is what’s funding the capex cycle, and I think demand is likely to continue irrespective of what’s happening with rates.”“
Source: https://www.taipeitimes.com/News/biz/archives/2026/10/18/2003866187
