CoreWeave shares fall 11.91% as funding concerns and rate-hike bets mount
Key Facts
CoreWeave shares closed the October 16, 2026 session down 11.91% at $61.39, according to MarketScreener data, as concerns mounted over the cost of financing artificial intelligence infrastructure. The stock's losses for the week ended that date reached 25.21%, in a selloff that coincided with increased bets on monetary tightening. Reuters linked those concerns to recent inflation data that bolstered bets on interest rate increases, adding to borrowing risks for debt-laden infrastructure companies. In credit markets, the agency reported on October 15 that default protection pricing pointed to an implied probability of default of nearly 63% over five years. That compares with an implied probability of about 30% a year earlier, according to the same report. This probability reflects investors' pricing of default risk over that period.
The market pressure comes despite growth in CoreWeave's business, with revenue reaching about $2,575 million in the second quarter of 2026, according to the company's filing with the U.S. Securities and Exchange Commission. Revenue was $1,212 million in the second quarter of 2025, highlighting the expansion in activity from the year-earlier period. But the net loss widened to $626 million in the second quarter of 2026 alongside that revenue growth. The loss in the year-earlier period was $290 million, according to the same filing. Net interest expense also rose to $640 million, from $267 million in the second quarter of 2025. Net interest expense thus exceeded the quarterly net loss at a time of growing investor concern over borrowing costs.
On cash flow, operations generated positive cash flow of $679 million in the second quarter of 2026, compared with cash used of $251 million in the year-earlier period, according to the company's filing. Meanwhile, cash spending on purchases of property and equipment, including capitalized internal-use software, totaled $6,422 million during the quarter. Those purchases rose from $2,453 million in the second quarter of 2025, exceeding cash generated from operations in the latest period. CoreWeave also announced that its contracted future revenue backlog stood at about $104 billion at the end of June 2026. Realizing that revenue remains subject to delivery conditions and service availability for customers under the contracts. These contracts represent future revenue subject to execution, rather than cash available to the company to repay its debt.
In August 2026, CoreWeave announced the closing of a $2.6 billion delayed-draw term loan facility, according to a financing announcement filed with the U.S. Securities and Exchange Commission. The company said the facility was intended to support the expansion of its platform and fulfillment of its commitments to customers as part of financing its business growth. The facility has a term of about 5 years, according to the announcement, which outlined the financing terms and their relationship to the underlying customer contracts. Those contracts have an average term of 3 years, making the loan's maturity longer than the average contract period with the customers tied to the financing. This mismatch between financing maturities and customer contracts makes contract renewals a factor in assessing the facility.
Addressing the funding concerns, Nvidia Chief Executive Jensen Huang said CoreWeave's financial strength was improving daily, according to Reuters. He added that he saw no need for Nvidia to provide a financial backstop to the company, expressing confidence in its financial position and the absence of a need for backup support. Evercore analysts also maintained their outperform rating on the stock despite the selloff, according to the agency. James Martin, chief U.S. credit strategist at Sumitomo Mitsui Banking Corp., said in Reuters' October 16 report that investors remained willing to finance projects further from completion. He added: "Investors are still comfortable financing them, but they are demanding more compensation for doing so." The Federal Reserve's next Federal Open Market Committee meeting is scheduled for October 27 and 28, 2026, according to the U.S. central bank's official calendar.