IREN Ltd (NASDAQ:IREN) shares are falling Wednesday. A spike in CoreWeave’s bond yield has sparked worries about AI financing, and a hot inflation report is weighing on rate-sensitive stocks.
- IREN stock is taking a hit today. What’s pressuring IREN stock?
Elon Musk Reacts to CoreWeave Bond Yield Spike
Elon Musk’s one-word reply, “Yikes,” landed under a graphic that venture capitalist Chamath Palihapitiya posted and sparked worry among neocloud investors.
The graphic tracks the yield on $1.25 billion of CoreWeave Inc (NASDAQ:CRWV) bonds with a 2032 maturity. It shows the yield briefly hitting 15% and then finishing at 14.5%, the highest close yet. Musk replied early Wednesday, which appears to be pressuring AI infrastructure names.
Palihapitiya Warns of AI Private Credit Bubble
Palihapitiya posted the graphic to argue that AI spending is inflating a “private credit bubble.” Palihapitiya projects that six large tech companies, among them Alphabet and Oracle, will lift capital spending from $470 billion in 2025 to above $1.3 trillion in 2027. Borrowing is covering the shortfall, Palihapitiya said, through debt, leases and similar arrangements.
Direct lending to U.S. borrowers ballooned from $96 billion in 2010 to roughly $2.4 trillion in 2025. On pricing, AI borrowers pay an average of 6.2 points over the base rate, barely above the 6.1 points on other private credit loans, Palihapitiya noted. Palihapitiya said the near-identical pricing hints that lenders are not charging enough for AI’s risks.
Jim Cramer touched on the same group this week. On CNBC’s “Mad Money” Lightning Round, Cramer faced a question about IREN and pivoted to CoreWeave. In the neocloud business, he said, CoreWeave is “the only one that I trust.”
If investors read a 15% yield as a sign that lenders demand far more from AI borrowers, IREN could face the same scrutiny of its funding. Palihapitiya’s point about thin loan spreads adds to that concern. If lenders have underpriced AI risk, pricing for the whole group could reset higher.
Hot CPI Hits Rate-Sensitive Stocks
Inflation data also landed Wednesday, and it ran hot. Consumer prices in September climbed 3.7% over 12 months, versus a 3.6% forecast from economists. Core prices, excluding food and energy, rose 2.6% versus 2.5% expected. Rate-sensitive stocks were especially hit hard in premarket trading.
Treasury yields surged, the dollar gained and gold dropped. Skyler Weinand, chief investment officer at Regan Capital, said inflation is “stubborn and moving in the wrong direction.”
Higher yields tend to pressure growth stocks whose valuations depend heavily on future cash flows, and investors view IREN as a long-duration AI infrastructure play due to its significant investments in data centers, power capacity and AI compute. Rising rate expectations also increase financing costs for capital-intensive expansion projects, leading many investors to reduce exposure across the broader AI infrastructure sector.
IREN Shares Are Sliding
IREN Price Action: Iren shares were down 10.78% at $31.05 at the time of publication on Wednesday. The stock is near its 52-week low of $28.93, according to Benzinga Pro.
Image: PJ McDonnell/Shutterstock
