CoreWeave CEO defends spending plans, tries to combat debt narrative as stock plummets nearly 20%

Core Viewpoint - Coreweave is committed to significant infrastructure investments despite recent stock declines due to profitability concerns, viewing this as a critical moment for capacity demand [1][2] Financial Performance - Coreweave's stock fell nearly 20% following disappointing revenue guidance, with plans to invest between $30 billion and $35 billion by 2026, exceeding the FactSet estimate of $26.9 billion [2] - The company has a substantial backlog, indicating strong future demand despite current market reactions [2] Debt and Business Model - Concerns have arisen regarding the sustainability of Coreweave's debt and its reliance on a limited number of clients, particularly major hyperscalers and AI firms like Microsoft and OpenAI [3] - Coreweave finances its operations through debt to acquire advanced AI Nvidia chips, which are then rented out [3] Cost of Capital - The CEO stated that the cost of capital has decreased by 300 basis points over the past year, translating to $700 million in savings across the company's debt load [4] - Over the last two years, the cost of capital has declined by 600 basis points, countering concerns about rising costs due to credit market issues [4]