CoreWeave's bond yields surged to a record 14.5%, signaling lender concerns about the AI cloud company's heavy debt burden and operating losses. Despite CoreWeave's revenue doubling, the company loses money operationally and carries $35.6 billion in debt. While Nvidia has significant exposure to CoreWeave through a $4.7 billion equity stake and a $6.3 billion capacity deal, the analyst argues Nvidia can absorb any CoreWeave problems given its massive operating income of $63.7 billion last quarter and recommends buying Nvidia stock.
Axe note: CoreWeave’s soaring debt yields spook lenders, but Nvidia’s profit engine remains solid.