Why Did CoreWeave Bonds Crush the Cloud Stocks?

One panelist says the biggest neoclouds got crushed after CoreWeave's bonds started to sell off. One panelist calls the selloff a possible canary in the coal mine and says the week may have been an AI bubble, if one exists, popping or deflating a little.

On Tuesday, people on X, including Chamath Palihapitiya, pointed out that the yield on some of CoreWeave's debt had hit 15%. Yields rose because bond traders are worried about CoreWeave's ability to generate enough cash to support its debt and want a higher rate of return. Elon Musk added one word, yikes, headlines followed, and everything tanked. CoreWeave, IREN, and Nebius were down about 20% as publicly traded companies. On Wednesday, CoreWeave, IREN, and Nebius were down between 10% and 15%.