CoreWeave Watch posted an update
CoreWeave shares fell again on Thursday after a 15.46% drop the day before, as investors questioned whether its debt-funded AI infrastructure build-out can pay for itself. Benzinga reports that the company had about $52 billion in combined debt and lease obligations at the end of June, while its second-quarter net interest expense rose to $640 million from $267 million a year earlier.
Why it mattersD.A. Davidson analyst Gil Luria questioned the economics, saying CoreWeave borrows at roughly 9% while earning returns of about 1%. Co-founder Brannin McBee defended the borrowing and said the company would be substantially cash-flow positive if it stopped building infrastructure today. That is the tension in a nutshell: new data centres may support future growth, but they also bring a sizeable financing bill.
Discuss: Is CoreWeave’s expansion a sensible bet on AI demand, or is the cost of building ahead of that demand becoming too high?
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