CoreWeave faces a pivotal test when it reports its third-quarter financial results after the bell on Tuesday.
The market will be closely watching what the neocloud company says about artificial intelligence spending — and how it plans to finance its infrastructure buildout. The outcome could either calm concerns over its debt or stoke more fear.
"Investors need neoclouds to quantify how much financing they expect to raise to execute on existing backlog," Wolfe Research said in a note Monday. "We think outlooks that communicate when and which avenues of funding will be tapped will increase investor confidence."
CoreWeave stock and bonds have come under pressure as fears deepened about the enormous amount of debt it has taken out to build its data centers.
Its stock is down roughly 40% over the past month. Meanwhile, the yield on its 9.75% bond due in 2031 was 15.5% on Tuesday, after jumping to 16.7% on Thursday as investors digested the election results and possible roadblocks to data center construction. Bond yields move inversely to prices.