CoreWeave Shares Plunge Amid Concerns Over AI Infrastructure Growth and Financial Risks
Shares of CoreWeave (CRWV) have fallen more than 60% from their June peak, reflecting growing fears that the AI infrastructure boom may have reached its peak, according to reporting by the Wall Street Journal.
Investors have highlighted two key risks facing CoreWeave: its heavy reliance on high-interest debt used to finance NVIDIA chips, and a revenue concentration primarily among OpenAI, Microsoft, and Meta.
Compounding these concerns, North Texas data center construction has been delayed due to heavy rain, which slowed concrete pours and pushed back timelines for delivering computing capacity.
In late October, CoreWeave's planned $9 billion acquisition of Core Scientific collapsed after Core Scientific (CORZ) rejected the deal, citing exposure to CoreWeave's volatility and leverage.
The landscape for AI-related infrastructure spending appears to be cooling more broadly. Shares of Oracle (ORCL) and Broadcom (AVGO) both declined by double digits over the past week following Q3 earnings reports that indicated slower AI spending.
Additionally, Bitcoin miners such as IREN (IREN) and Cipher Mining (CIFR) have been pivoting toward AI workloads and recently signed Microsoft among their customers. Despite surging more than 500% earlier this year, these companies have seen their shares fall about 50% in recent weeks.
The intersection of crypto and AI mining is raising concerns as the sector increasingly depends on debt to fund expansion.
CoreWeave shares recently traded below $70 for the first time since May, underscoring investor unease amid these challenges.
