Key Points
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CoreWeave is growing like a weed, but it’s deeply unprofitable.
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It’s more leveraged than its closest competitors.
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Its bond yields will keep climbing if the Fed continues to raise its benchmark rates.
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CoreWeave (NASDAQ: CRWV), a “neocloud” provider of AI infrastructure services, is one of the tech sector’s fastest-growing stocks. At the end of 2022, it only operated three data centers. Today, it operates 51 data centers with over a quarter-million Nvidia (NASDAQ: NVDA) GPUs.
From 2022 to 2025, its revenue surged from $16 million to $5.13 billion as more companies adopted its dedicated cloud-based GPUs, which can train AI models roughly 35 times faster and at 80% lower cost than larger cloud infrastructure platforms. But its net loss widened from $31 million in 2022 to $1.17 billion in 2025 as it leased more data centers and bought more GPUs.
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To fund that expansion, CoreWeave issued more shares and took on more debt. It’s increased its share count by 19% since its IPO in March 2025, and it ended the second quarter of 2026 with $72 billion in total liabilities and an alarmingly high debt-to-equity ratio of 14.3. The average yield to maturity on its senior unsecured bonds also ranges from 14.1% to 15.6%. Let’s see why those high yields are a bright red flag — and what they might mean for its neocloud peers.
Could CoreWeave run out of cash in the early 2030s?
CoreWeave’s senior bonds will start to mature in 2030. Let’s see how much it owes on each of those tranches, their yields, their maturity dates, and current market prices.
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Senior Note Issue / Maturity
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Coupon
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Yield to Maturity
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Amount
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Market Value
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June 2030
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9.25%
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13.7%-15.8%
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$2.00 billion
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$0.79
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February 2031
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9.00%
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14.5%
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$1.75 billion
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$0.83
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October 2031
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9.75%
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15.6%
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$2.75 billion
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$0.80
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July 2032 USD
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9.63%
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14.5%
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$1.25 billion
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$0.81
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July 2032 EUR
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8.50%
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14.1%
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€2.00 billion
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$0.79
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Data source: CoreWeave.
CoreWeave has already been issuing its debt at high yields, but it will likely need to issue even higher-yielding bonds if the Federal Reserve keeps raising its benchmark rates. That’s bad news for a company that spent roughly a quarter of its revenue on interest payments ($1.23 billion in 2025 and $1.18 billion in the first half of 2026) for its outstanding debt.
To tread water, CoreWeave has been issuing more convertible debt with lower cash coupons (1.75%-2.875%) to reduce its dependence on bonds. But its $10.8 billion in convertible debt could be converted into new shares upon maturity, diluting its existing investors.
Most of CoreWeave’s senior notes are still trading at about $0.80 on the dollar, which implies the market hasn’t lost faith in its ability to pay off its debt. But that 20% discount suggests investors are fully confident it will remain solvent through the early 2030s.
From 2025 to 2028, analysts expect CoreWeave’s revenue to surge from $5.13 billion to $43.55 billion — but its net loss could barely improve from $1.20 billion to $1.09 billion. That pressure will make it tough for CoreWeave to expand without issuing even more debt.
Is that a red flag for other neocloud companies?
Most of CoreWeave’s direct competitors will face similar headwinds if interest rates continue to rise. However, CoreWeave remains more leveraged than many of its industry peers.
Nebius (NASDAQ: NBIS) and IREN (NASDAQ: IREN), which are both growing faster than CoreWeave, ended their latest quarters with debt-to-equity ratios of 1.7 and 2.8, respectively. Over the past two years, Nebius’ share count rose only about 15%, while IREN’s surged 78%.
Nebius’ senior notes only have an average coupon rate of 1.7%-2.2%, while IREN’s convertible senior notes were issued at 1%-3.5%. While CoreWeave’s soaring bond yields might be a red flag for other expanding neocloud companies, it’s much closer to walking off the end of the plank than its closest competitors.
CoreWeave is much bigger than Nebius and IREN, and it could still have plenty of room to grow as it converts its massive backlog (at $104 billion in the second quarter of 2026) into revenue. But if interest rates keep rising, it could struggle to fulfill its debt obligations in the early 2030s. That pressure could make it tougher for smaller players like Nebius and IREN to secure more financing at reasonable rates — so investors in neocloud stocks should recognize these long-term risks.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
