CoreWeave Equity Could Go to Zero if AI Cycle Sputters, D.A. Davidson's Luria Says

MT Newswires Live10-15

CoreWeave (CRWV) would likely be the first company to fail if the AI cycle sputters or turns, with its equity value falling to zero, D.A. Davidson analyst Gil Luria said on the Prof G Markets podcast.

Luria called the company a "poster child for bad behavior," saying it is borrowing at about 9% to fund a speculative asset while earning returns of around 1%, with a potential increase to 4% to 5% at best.

He compared the strategy to an individual investor taking a 9% margin loan to buy Treasuries yielding 5%, calling it "destruction of value," and warned CoreWeave would be unable to make interest payments and would be "wiped out" if conditions worsen.

The comments came as CoreWeave's unsecured notes were yielding about 15% amid a debt selloff, the podcast host said.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment