Nvidia Chief Defends CoreWeave as Shares Head for Steep Weekly Loss

Updated 10:24 UTC

NEW YORK. CoreWeave shares dipped 4.1 percent in premarket trade on Friday, October 16, and were headed for steep weekly losses, a day after Nvidia chief executive Jensen Huang publicly defended the AI cloud company and its debt heavy model.

As of the last close, the shares were down more than 15 percent this week, on course for their biggest weekly fall in about two months, Reuters reported. The stock was also on track to erase a fifth of its value this month. Rival Nebius fell 1.5 percent on Friday morning.

CoreWeave is a loss making cloud company with about 50 billion dollars in debt. It rents out computing power built on Nvidia graphics processors, and it has borrowed heavily to buy chips and build data centres ahead of revenue that is expected to arrive later.

Huang pushes back in Stockholm

Huang spoke to reporters at an event in Stockholm on Thursday, October 15. Nvidia is a major CoreWeave customer and an investor with about a 10 percent stake.

He said CoreWeave's financial strength is improving every day, that he is optimistic, and that its cost of capital is actually decreasing. He added that he does not see a need for Nvidia to backstop the company.

His remarks helped the stock recover on Thursday. Shares closed up 5.9 percent at 69.69 dollars in New York after falling as much as 8.3 percent during the day to their lowest level since May 2025. CoreWeave chief executive Mike Intrator had told staff in a memo on Wednesday that the company's deal backlog more than covers its debt obligations and that markets can misunderstand and act irrationally.

Analysts at Cantor Fitzgerald also defended the company on Thursday. The firm kept its Overweight rating and a 176 dollar price target and called much of the recent criticism fearmongering.

Credit markets say otherwise

Bond investors have moved the other way. CoreWeave bonds issued in June at a yield of 9.675 percent have fallen hard, sending their yield to 15 percent this week, Reuters reported. The yield on its October 2031 bond briefly rose past 16 percent on Thursday, a level traders treat as distressed. That bond was set for a fifth straight weekly fall, down about 3 cents on the dollar this week.

The cost of insuring CoreWeave debt against default rose past 1,000 basis points to a record high this week, according to S and P Global Market Intelligence data cited by Reuters. BCA Research analysts said a hot inflation print triggered the sharp selloff because CoreWeave is a highly indebted bet on future data centre demand,.

The share slide started earlier in the week. CoreWeave fell more than 15 percent on Wednesday, October 14, the biggest fall in the selloff, as worries spread across so called neocloud firms. A Gartner note cited in the reporting said about 80 percent of neocloud providers could shut down by 2030 at the current spending pace.

Why one company matters

Analysts quoted by Reuters called CoreWeave a test of how far investors will go to fund the AI build out with borrowed money. Max Frumes at 9fin called the company the canary in the coal mine for that part of the market and said credit for AI projects is likely to get more expensive and face more scrutiny.

That is the split at the heart of the story. Demand for AI computing is real, and CoreWeave has customers and a large backlog. The open question is price: what it costs a loss making company to borrow tens of billions of dollars while rates stay high, and whether future revenue arrives fast enough to cover it.

What happens next

Watch the bonds first. If CoreWeave yields stay near distressed levels, other AI infrastructure firms that rely on debt will face harder terms when they next raise money. If yields fall back, Huang's case gains ground. For now, equity investors took his word on Thursday and sold again on Friday.