CoreWeave Shares Surge 19% Following Oversubscribed $2 Billion Debt Offering

Shares of CoreWeave surged 19% following the announcement of a $2 billion debt offering. The company, known for renting NVIDIA-chip-powered data centers for artificial intelligence (AI) applications, priced the notes at 9.25%, with a maturity date set for June 2030. This latest offering represents a significant $500 million increase from the initially announced amount. CoreWeave confirmed to CNBC that the debt offering was five times oversubscribed, reflecting strong market interest. In its first-quarter earnings report released last week, CoreWeave disclosed raising a total of $17.2 billion in both equity and debt. This substantial influx of capital is intended to support the company’s strategy of advancing next-generation cloud computing for AI. Despite exceeding revenue expectations, CoreWeave reported a wider-than-expected net loss and projected significant capital expenditures to meet growing infrastructure demand. During an interview on CNBC's "Squawk on the Street" last week, CEO Michael Intrator addressed investor concerns over the company's debt and the sustainability of demand. He emphasized that CoreWeave is responding to "demand signals" from key clients and remains confident in its growth trajectory. On a call with analysts, the company noted that it has no significant debt maturities until 2028, aside from payments related to vendor financing and self-amortizing debt via committed contract payments. At the end of the quarter, CoreWeave had approximately $3.8 billion in current debt and $4.9 billion in non-current debt. A year ago, CoreWeave secured a $7.5 billion debt financing round led by Blackstone and Magnetar. This funding was aimed at intensifying investment in its cloud data centers, with the company stating in its IPO prospectus that it was one of the largest private debt financings ever, underscoring the confidence debt investors have in CoreWeave's ability to build and scale the next generation AI cloud. CoreWeave’s customer base includes industry giants like NVIDIA and Microsoft. Additionally, the company has signed two separate deals with OpenAI, totaling nearly $16 billion, further solidifying its position in the AI market. These collaborations highlight the critical role CoreWeave plays in supporting cutting-edge AI technologies and the robust demand for its services.