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It’s part of his new initiative to transform Tesla and dominate the 3rd phase of the AI revolution.
Watch this for all the details – and get 5 hidden stocks prepared to profit.
CoreWeave (Nasdaq: CRWV) had a brutal week. The AI cloud company fell 21% to below $63. And yields on its unsecured bonds jumped toward 15%.
On Friday morning, the stock continued falling to $63. That was the lowest level since July.
Credit default swaps, which work like insurance against a company failing to repay its debt, climbed to record levels. The bond market is pricing CoreWeave like a company in trouble. The rest of the evidence points the other way.
Nvidia (Nasdaq: NVDA) CEO Jensen Huang spoke at an event in Stockholm. He said Nvidia doesn’t need to backstop CoreWeave.
“CoreWeave’s strength is improving every day. Their cost of capital is actually decreasing.”
Want to invest in Nvidia’s next big AI breakthrough? Here’s the link that reveals everything.
Huang’s point on cost of capital checks out.
CoreWeave’s unsecured 2032 bonds trade below 80 cents on the dollar, yielding over 15%. But in March, the company closed an $8.5 billion loan that Moody’s rated investment grade. The fixed-rate portion was priced at roughly 5.9%. That’s about 7.5% cheaper than CoreWeave’s first GPU-backed loan.
The reason for the gap is a structure CEO Michael Intrator calls “the box.”
Here’s how it works…
CoreWeave signs a long-term contract with a customer like Microsoft (Nasdaq: MSFT). It puts that contract, the Nvidia GPUs and the data center lease inside a separate entity. Customer payments go into the box first. The power bill, interest and principal get paid before any cash flows back to CoreWeave.
The CEO says everything is paid off within 2.5 years of a five-year deal. Lenders backed by those contracts get their money back, which is why they lend cheaply. The unsecured bonds don’t have that protection, and that’s where the fear sits.
Demand isn’t the issue.
CoreWeave’s contracted backlog hit $104.2 billion at the end of June, up from about $30 billion a year earlier. That doesn’t include more than $25 billion in new customer commitments signed early in the third quarter. Second-quarter revenue more than doubled to $2.6 billion.
Bank of America and Deutsche Bank both reiterated Buy ratings after the selloff. BofA raised its revenue growth forecasts to 105% for 2027 and 63% for 2028. And Cathie Wood’s ARK Invest bought more shares this week.
CoreWeave has more customer demand than it can currently serve. The challenge is financing the buildout fast enough to keep up.
Shares are down 65% from their 52-week high and trade at about 5x trailing sales. BofA’s price target is $140, and Deutsche Bank’s is $150. That’s upside of roughly 100% to 115% from Thursday’s close.
CoreWeave has been on my Watch List. And I’m considering adding the stock to my portfolio.
The demand for AI is unstoppable. It’s only accelerating with the 3rd phase of the AI revolution. But don’t take my word for it…
Just take a look at the actions of Elon Musk, Sam Altman and Jensen Huang. They’re investing billions and preparing for a new era of industrialization – unlike anything we’ve seen before.
Simply click for this untold story.
Ian Wyatt
Editor, Daily Profit