Goldman Sachs Upgrades CoreWeave Despite 15% Bond Yields as Stock Jumps 6%

CoreWeave Inc. (NASDAQ:CRWV) shares jumped 6% in premarket trading Monday after Goldman Sachs upgraded the AI cloud provider, despite a bond-market selloff that has pushed yields on its debt toward 15%.

The upgrade follows a brutal week for CoreWeave, whose shares lost roughly a quarter of their value as investors questioned whether it could sustain its ambitious AI infrastructure buildout.

Goldman Sees a Stronger CoreWeave

Goldman upgraded CoreWeave from Neutral to Buy, arguing that the company ranks among the strongest operators in the AI cloud industry.

Analysts led by Gabriela Borges expect CoreWeave to finance its future expansion at borrowing costs only modestly above existing levels. That confidence contrasts with the bond market, where debt issued in June at a yield of 9.675% was trading near 15% last week, Reuters reported.

Billionaire investor Chamath Palihapitiya estimated on Friday’s All-In podcast that CoreWeave needs another $35 billion in borrowing to finance its existing customer commitments.

CoreWeave signs long-term contracts before borrowing money to build the infrastructure needed to fulfill them. Rising interest costs could therefore erode the returns on deals already signed.

Ben Horowitz, co-founder of Andreessen Horowitz, described neoclouds as “Rube Goldberg financial machines,” warning on the same podcast about their complicated financing arrangements.

Why the Bond Market May Be Wrong

But David Sacks, also speaking on All-In, offered a more optimistic interpretation.

“My impression is that there’s not a deeper credit problem in terms of financing these projects,” he said.

Sacks argued that CoreWeave finances individual projects against valuable GPUs and contracts with creditworthy customers such as Microsoft.

The 15% yield reflects what investors now demand to buy CoreWeave’s existing bonds, not what the company currently pays in interest.

Semiconductor research firm SemiAnalysis documented a 5.9% rate on a tranche of CoreWeave’s Meta-backed financing in July, compared with roughly 10% on its unsecured bonds at the time. The gap shows why loans backed by major technology customers can be considerably cheaper.

Still, prediction traders are pricing in substantial longer-term risks.

On Polymarket, traders Monday assigned a 29% chance to CoreWeave announcing bankruptcy by the end of 2029, with approximately $270,000 traded across the market.

D.A. Davidson analyst Gil Luria warned last week that shareholders could lose everything if the AI spending boom falters. Goldman, however, believes CoreWeave can continue financing its expansion at manageable borrowing costs.

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