CoreWeave Shares Fall as Rising Debt and Depreciation Warnings Weigh on Neocloud Sector

Shares of CoreWeave, Inc. (CRWV) fell 15.46% to $65.78, extending losses to 53% below the high for the year. The sell-off comes as investors process mounting financial pressures on the specialized cloud computing company, including rising borrowing costs and broader concerns about artificial intelligence infrastructure spending.

CoreWeave has accumulated nearly $30 billion in total debt to buy servers and graphics processing units to serve its $104 billion revenue backlog. However, annual interest expenses reached $640 million, and yields on the company's 2032 bonds surged to 14.30% from a low of 9.4% earlier this year. A recent industry report from Gartner warned that neocloud providers could face major asset writedowns by 2030. While CoreWeave depreciates its equipment over a six-year period, some industry analysts argue fast-moving technological advancements could shorten the useful life of AI hardware to two or three years, accelerating depreciation costs.

Investors are monitoring how rising interest expenses and potential share dilution affect the balance sheet. Technical indicators show the stock has broken below key support levels, including its September low of $78.17 and its 50-day and 100-day moving averages, pointing to continued downside pressure if borrowing costs remain elevated.