Breakfast News: Week in Review
Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) both dropped over 3% on Wednesday as hot inflation dragged down the broader market. AI stocks took an extra hit when a viral chart on X showed yield on bonds issued by CoreWeave (NASDAQ:CRWV) — which borrows to buy Nvidia chips and rent them out — spiking to 15%, roughly triple government rates. The news reignited fears over AI debt, with Chamath Palihapitiya and Elon Musk taking to X to discuss whether a private credit bubble might be brewing.
Last week we wrote that borrowing costs were climbing and the borrowing continued anyway. This week bond buyers started demanding more for the risk. Nvidia and Broadcom sell to customers who borrow to buy. If that debt gets expensive enough, the orders slow down.
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