Core Insights - The generative AI bubble has led to significant stock price declines for CoreWeave and Oracle, with drops of 62% and 47% respectively since their peaks earlier in 2025 [2][3] Company Performance - CoreWeave's business model involves leasing data centers filled with GPU-heavy clusters for processing capacity, but it faces challenges such as high borrowing costs (7.5%) and operational delays [4][18] - Oracle is struggling with a lack of cash flow to meet its $500 billion cloud services backlog, leading to increased borrowing from $100 billion to an estimated $290 billion over the next three years [15][16] Market Sentiment - Concerns about the generative AI bubble have heightened, with analysts becoming more cautious about the future of both CoreWeave and Oracle [17] - The rising cost of credit default swaps (CDS) indicates increasing investor anxiety, with a 90% surge in CDS trading since September [22] Financial Projections - The likelihood of a soft landing for AI valuations has dropped from 35% to 15%, with a more probable boom-or-bust outcome emerging [9][10] - The most pessimistic scenario involves OpenAI failing to raise sufficient capital, potentially leading to a 60% revenue loss for CoreWeave and significant markdowns for Oracle and Nvidia [12][13] Investment Risks - CoreWeave's operational challenges and confusing communications have contributed to investor concerns, while Oracle's higher debt levels and lower credit ratings compared to peers raise additional risks [21][20] - The cost of insuring against default on CoreWeave's debts has soared to 7.9 percentage points, reflecting heightened market fears [23]