CoreWeave debt concerns put Nvidia under scrutiny

CoreWeave’s shares broke below their key $85-$90 support zone between August and last week, adding to concerns about the AI infrastructure boom. The company has around $50 billion in debt, while Nvidia holds a ~10% share stake. CoreWeave’s five-year credit default swap traded at record distress levels, signaling that the market is pricing in an increasing risk of default.

Most of CoreWeave’s debt is backed by Nvidia chips. A default could trigger liquidation and flood the market with excess AI servers, creating a potential supply shock for the sector. Nvidia shares have fallen by around 13% from their 52-week high, putting its position as the most valuable company at risk of slipping behind Apple.

Weakness has spread across AI-related stocks. Coherent and Lumentum dropped by close to 10% last week, while AMD and Intel erased recent gains. Broadcom and Taiwan Semiconductor failed to rise after strong quarterly results. Bearish sentiment has intensified this month, though a reversal could depend on whether speculators remain willing to bet that the AI boom is accelerating.