"CoreWeave, for instance, offered a $2.25 billion convertible bond last week that will dilute existing shareholders, according to the Wall Street Journal. But for Q3, CoreWeave reported $3.7 billion in current debt, $10.3 billion in non-current debt, and $39.1 billion in future lease agreements for data centers. The company expects to make only $5 billion in revenue this year but says it has $56 billion in " revenue backlog" coming in the future."
"The collapse in market caps of Oracle and CoreWeave is on the scale of the declines we saw in 2000 or 2008. Surely that's evidence of the AI bubble bursting?Well, kinda. The S&P 500 stepped back only 0.16% yesterday. Futures are down 0.4% this morning. The index is still up 16% for the year. Markets in Asia and Europe were broadly down this morning-signaling that some kind of selloff is underway. But it doesn't look as catastrophic as what's happening to Oracle and CoreWeave."
Investors are sharply selling individual AI infrastructure names after large share declines and heavy debt loads, notably Oracle and CoreWeave. CoreWeave shows substantial current and non-current debt, large future lease obligations, modest near-term revenue expectations, and a claimed large revenue backlog. The S&P 500 and futures registered only minor declines and remain positive year-to-date, supported by strength in certain mega-cap techs like Tesla and Nvidia. Markets in Asia and Europe exhibited broader weakness, but the impact appears concentrated in overextended companies. The activity signals stock-specific risk rather than a broad market collapse.
Read at Fortune
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