(Oct 16): CoreWeave's shares and bonds were headed for steep weekly losses on Friday, as investors grew uneasy about the debt financing behind the AI build-out in the face of rising borrowing costs.

The firm's shares dipped 4.1% in pre-market trading on Friday, after jumping 5.9% in the last session.

As of last close, the shares were down more than 15% this week, on course for their biggest weekly decline in about two months.

AI infrastructure stocks fell this week as hot inflation raised borrowing-cost worries.

"A hot inflation print triggered a sharp sell-off in CoreWeave because its business model is a highly indebted play on future data centre demand," BCA Research analysts said.

"Although the rest of the tech complex is also sensitive to the pace and magnitude of AI adoption and use, it is, on average, considerably less sensitive to interest rates".

Shares of rival Nebius Group fell 1.5% on Friday morning, also set for their steepest weekly fall in two months.

CoreWeave is a loss-making cloud company that has about US$50 billion (RM204 billion) in debt.

The yield on CoreWeave's October 2031 maturity dollar bond briefly surged past 16% on Thursday.

The bond is set to decline for a fifth straight week, down about three cents on the dollar this week.

Cost of insuring against CoreWeave's debt surged past 1,000 bps to record highs this week — S&P Global Market Intelligence data.

As of last close, CoreWeave shares were on track to erase a fifth of their value this month.

Uploaded by Magessan Varatharaja