Investing.com — CoreWeave Inc (NASDAQ:CRWV) shares jumped on Monday after the AI infrastructure provider unveiled plans to raise $1.5 billion through a senior notes offering, bolstering its balance sheet to support continued growth. The stock surged 4.5% following the announcement as investors responded to the company’s move to lean into long-term demand for AI compute capacity.
The new 2031-dated bond comes as CoreWeave continues to navigate a stretched balance sheet, with $8 billion in total debt reported as of December 2024. The offering will be made to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S, and will be guaranteed on a senior unsecured basis by certain wholly owned subsidiaries.
Analysts have generally remained constructive on CoreWeave’s near-term outlook despite the capital structure concerns. “From a numbers perspective, we are expecting another double-digit beat, with current consensus assuming 10% q/q growth, which feels conservative given the ongoing Microsoft (NASDAQ:MSFT) B200 ramp management spoke to last quarter,” noted Barclays analyst Raimo Lenschow.
Still, the company’s aggressive expansion strategy, centered on massive investment in GPU infrastructure, has come at a cost, with elevated interest burdens raising flags about cash flow resiliency in a cyclical market. CoreWeave issued $2 billion in new notes in May and follows that just two months later with this $1.5 billion issuance, moves that could signal a need to refinance rather than organic deleveraging.
Since debuting in public markets in late March, CoreWeave’s has proven an AI darling, initially spiking from $40 to $187 before stabilizing in the $125 to $140 range. Lenschow’s updated price target of $140 reflects both expectations for sustained customer demand in AI cloud services and the limitations posed by valuation, which he described as “full (~50x CY26E EV/EBIT).”
CoreWeave’s differentiated infrastructure, reportedly offering up to 35 times faster and 80% cheaper computing compared to AWS or Google (NASDAQ:GOOGL) Cloud, has positioned it as a leader in the AI acceleration space. However, the company’s reliance on debt to fund its buildout raises long-term questions, particularly if hyperscaler spending slows or AI workload monetization falls short.
Moody’s assigned a B1 rating to CoreWeave’s newly announced $1.5 billion senior unsecured notes due 2031, while maintaining its Ba3 corporate family rating and a stable outlook. Fitch similarly rated the notes at BB- with a Recovery Rating of ’RR4’, noting CoreWeave’s strong revenue visibility, capital discipline, and projected deleveraging, supported by a $25.9 billion backlog and robust EBITDA growth through 2026.