CoreWeave Bond Yields Top 16% as Debt and Texas Data Centre Risk Weigh Before Earnings

Coverage of the move differs on the exact level. Investing.com reported that yields on CoreWeave's corporate bonds rose above 17% in early November. Either way, lenders are demanding far more than the coupon the company agreed to pay when the notes were issued. For investors in the wider AI trade, CoreWeave has become the clearest test of whether debt-funded GPU capacity can keep attracting capital. The company borrows heavily to buy Nvidia GPU clusters and rents the computing power to AI developers.

The credit stress shows up in other markets too. CoreWeave's five-year credit default swaps rose past 1,289 basis points on Thursday before easing 8% to 1,155 basis points on Friday, TipRanks reported. The shares fell 15% last week and are down more than 44% over a month. Investing.com reported that the stock hit a record low of $49.92. CoreWeave pointed lower again in Monday's pre-market session, as Nvidia shares fell after the chipmaker's board opened an inquiry into chief executive Jensen Huang.

The Cost of Borrowing

The numbers investors will examine on Tuesday centre on interest. CoreWeave's interest expense rose to $640 million in the second quarter from $267 million a year earlier, and the company has guided to between $860 million and $940 million for the third quarter. Second-quarter free cash flow was negative $5.74 billion, and management has guided 2026 capital spending to $35 billion to $39 billion. Investing.com puts the company's debt at nearly $50 billion.

CoreWeave has guided to third-quarter revenue of $3.45 billion to $3.6 billion. TipRanks said analysts expect full-year revenue of $12.9 billion and a loss of $3.98 per share. Investors will also look for a funded construction plan and for signs that more than $25 billion of commitments signed early in the third quarter have entered the backlog.

Customer concentration adds to the risk. Microsoft accounted for about 67% of CoreWeave's 2025 revenue, up from 62% in 2024. Microsoft has committed more than $80 billion to outside cloud leases, but TipRanks reported that it is winding down a rental arrangement with Oracle and cutting back on smaller AI cloud suppliers.

A Letter to Austin

Texas politics is the newest pressure. Gina Hinojosa, the Democrat elected Texas governor last week, campaigned on a statewide pause on new AI data centre construction and tighter rules on local water and power use. She has described the current regulatory environment as a corporate "Wild West", according to Investing.com. She takes office in January.

CoreWeave chief executive Michael Intrator has written to Hinojosa saying the company backs her goals. "You have made clear that data center growth must work for Texas," he wrote, adding that CoreWeave would "strongly support those principles". He asked to work with her transition team on the "responsible completion of permitted projects and on clear, durable standards for future development".

According to TipRanks, the letter asked that already permitted projects at CoreWeave's six active Texas sites be allowed to finish. The sites are in Austin, Denton, Dickens County, Plano, Richardson and Round Rock. Intrator said the company intends to remain "a responsible, long-term partner to the state and the communities where we operate". He also said its liquid cooling keeps daily water use "comparable to, or lower than, a commercial office building of similar size".

Analysts remain broadly positive on the stock. TipRanks cited a Moderate Buy consensus from 21 Buy, five Hold and three Sell ratings, with an average price target of $126.96, more than double the recent record low. Tuesday's report is the first since the midterm elections and the Texas result. It will show whether CoreWeave can fund its build-out at current borrowing costs, and whether any of its Texas capacity is at risk under the new administration.