- The Fed raised its target rate range to 3.75%-4%, the first increase since 2023, and hinted another hike could follow.
- CoreWeave carries more than $51 billion in debt against $5.54 billion in cash, and its interest expense of $640 million in Q2 exceeded adjusted operating income of $128 million.
- CoreWeave grew revenue 112% year over year to $2.6 billion in Q2, posted adjusted EBITDA of $1.5 billion, and raised full-year guidance on a backlog above $100 billion.
- Nebius holds roughly $2 billion in net debt versus CoreWeave's $46 billion and funds spending largely through customer prepayments, insulating it from the rate increase.
- CoreWeave shares have tumbled almost 40% from May highs on debt fears, and one analyst argues the selloff has been overblown.
Quotes
“The Federal Reserve just raised interest rates for the first time since 2023, lifting its target range to 3.75% to 4%. It also hinted another increase could follow.”
“CoreWeave carries more than $51 billion in debt, which is more than its market cap itself. Its interest bill now runs higher than its operating income.”
“Nebius carries roughly $2 billion in net debt against CoreWeave's $46 billion.”
“CoreWeave shares have tumbled almost 40% from their May highs as debt fears spooked investors. But one analyst believes the selloff has been overblown.”