CoreWeave’s stock slump spotlights cracks in the AI infrastructure boom
CoreWeave (CRWV) has seen a brutal retreat — its share price is down more than 60% from June’s highs — raising fresh doubts about whether the AI infrastructure buildout has already passed its peak. A Wall Street Journal report on Tuesday underscored how quickly the fast-growing sector can become fragile when operational hiccups, heavy leverage and tighter credit collide.
Two vulnerabilities stand out. First, CoreWeave has been financing large purchases of NVIDIA (NVDA) AI GPUs with expensive debt, leaving the company exposed to rising interest costs and tighter lending conditions. Second, revenue is concentrated among a handful of very large customers — notably OpenAI, Microsoft (MSFT) and Meta (META) — creating material client-concentration risk.
Even mundane infrastructure problems have had outsized effects. Heavy rainstorms in North Texas delayed concrete pours at a major data-center site, pushing back delivery of new computing capacity and showing how routine construction setbacks can ripple through trillion-dollar AI investment plans.
Investor confidence took another hit in late October when CoreWeave’s proposed $9 billion acquisition of Core Scientific (CORZ) unraveled. Core Scientific shareholders balked, warning that the deal would expose them to CoreWeave’s volatile stock and leveraged balance sheet, and the target ultimately rejected the bid.
The chill isn’t limited to CoreWeave. Oracle (ORCL) and Broadcom (AVGO) both slumped by double-digit percentages after third-quarter results that flagged slower or delayed AI-related spending, reinforcing worries about timing and demand for large-scale AI capacity.
There’s also been a notable spillover into crypto-related miners who have been chasing AI revenue. Former bitcoin miners such as Iris Energy (IREN) and Cipher Mining (CIFR) pivoted into high-performance computing and signed customers including Microsoft — runs that helped send their shares up more than 500% earlier this year, only for both to retreat roughly 50% in recent weeks. The bitcoin-mining sector’s growing dependence on debt to fund expansion adds another layer of systemic concern.
Market reaction continued on Tuesday: CoreWeave shares slipped another 4%, trading below $70 for the first time since May. The episode is a reminder that the AI infrastructure boom — while massive in scale — remains vulnerable to execution delays, concentrated customer exposure and the strain of leveraged growth.
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