CoreWeave Inc. (NASDAQ:CRWV) shares bounced off their worst levels Thursday after Nvidia Corp. (NASDAQ:NVDA) CEO Jensen Huang publicly backed the embattled AI cloud provider.
“CoreWeave’s strength is improving every day,” Huang said at an event, Reuters reported. “I’m optimistic. Their cost of capital is actually decreasing.”
Huang also said he did not see a need for Nvidia to backstop CoreWeave.
- CRWV stock is climbing. See the chart and price action here.
Huang’s Comments Land During a Brutal Stretch
The CoreWeave shares fell 15% to $65.78 on Wednesday, their biggest single-day decline since February.
Selling resumed Thursday morning, with the stock down 6% before the opening bell as investors worried about how much CoreWeave and other tech companies are borrowing to fund the AI build-out.
Huang’s remarks helped stem the bleeding. By 2 p.m. ET, CoreWeave had erased the day’s losses and was up 2.86% at $67.66, per Benzinga Pro market data.
Bond Investors Remain Skeptical
Credit markets are sending a far less hopeful signal. The yield to maturity on CoreWeave’s 9.75% bonds due 2031 climbed to 15.78% Thursday, while the spread on its five-year credit default swaps briefly topped 1,140 basis points before settling at 1,088, CNBC reported.
Higher bond yields do not immediately raise CoreWeave’s interest bill on existing fixed-rate notes. Future borrowing is another matter. The company has taken on more than $51 billion in debt and obligations to finance its AI infrastructure buildout, and continued growth depends on steady access to capital markets.
Huang’s claim about a falling cost of capital sits awkwardly next to those numbers. Still, his words carry weight. Nvidia supplies CoreWeave’s GPUs, invested $2 billion in the company in January and ranks among its largest shareholders.
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What Comes Next
Investors will want evidence CoreWeave can keep raising money on reasonable terms. CEO Mike Intrator has argued the company’s deal backlog is more than large enough to support its debt obligations. Bond traders want proof.
CRWV Stock Price Activity: CoreWeave shares were up 3.8% at $68.28 at the time of publication Thursday, according to Benzinga Pro.
Shares are down about 14% year-to-date.
Photo: Shutterstock
