CoreWeave bonds have slipped into distressed territory, a development noticed by Chamath Palihapitiya on 14 October. Shares of the company have plummeted by more than 20 percent since that same date.
Brannin McBee stated that CoreWeave wants its debt to be investment-grade rather than junk. The firm secured its first investment-grade chip loan earlier this year.
More than $35 billion in debt was owed by CoreWeave as of its second quarter earnings. The company reported a loss of over $1 billion dollars during the first half of the year.
Remaining performance obligations totalled $103.7 billion as of the second quarter. Forty percent of those remaining performance obligations are scheduled for payment in 2028.
Microsoft, OpenAI, and Nvidia accounted for almost three-quarters of the revenue generated by CoreWeave in the second quarter. Oracle shares declined by almost 10 percent during the same period, accompanied by a sell-off in Oracle bonds.
John Yovanovic said, "The problem is not that credit profiles have changed in the last year, it’s that we’ve got another year and a half of supply coming."
