Lenders Are Getting Nervous About CoreWeave. I’d Still Buy Nvidia Stock.
Lenders are getting nervous about CoreWeave (NASDAQ:CRWV), a cloud company that rents out artificial intelligence (AI) chips made by Nvidia (NASDAQ:NVDA). In June, CoreWeave sold $1.25 billion in unsecured notes due 2032 at face value, with a 9.625% coupon. On Tuesday, Oct. 13, the yield on these notes reportedly reached almost 15% before ending at a record of around 14.5%.
A bond’s yield climbs when the price drops. Put another way, bond buyers now want much more to lend to CoreWeave than they did four months ago.
The stock followed on Wednesday. CoreWeave shares dropped about 15% as of this writing, and Nvidia, which is both CoreWeave’s chip supplier and one of its shareholders, fell about 3% to roughly $221.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.