CoreWeave says market acting ‘irrationally,’ stands by model
Shares slid 15% to $65.78 on Wednesday, the biggest one-day drop since February, after an 8.7% gain for the year through Tuesday
CoreWeave CEO Mike Intrator maintains confidence in the company's business model despite a significant drop in stock and bond prices. He attributes the market's reaction to being "irrational" and emphasizes the robustness of the company's deal backlog, which he believes can comfortably cover its debt obligations. Intrator's remarks come after CoreWeave's bonds fell to levels usually associated with distress, and the company's shares dropped by 15% to $65.78, marking their largest single-day decline since February.
The CEO wrote an internal memo to staff, stating that periods of misunderstanding by the market are expected when building a new technology company. He is confident in CoreWeave's execution quality, customers, and financial engine. CoreWeave has gained attention as a key indicator of the global AI infrastructure boom, with its valuation nearing $37 billion since its public debut last year.
However, concerns about an AI bubble and the extensive borrowing across the industry have led to investor unease. Intrator attributes the market's reaction to rival companies' struggles, including delayed IPOs and debt financings for firms like AirTrunk and Firmus Grid.
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