CoreWeave, Inc. Class A Common Stock

A growing roster of investors, strategists and industry leaders are warning that the artificial-intelligence boom may be nearing a breaking point, with concerns shifting from the debt and interest rates funding massive data centers to the technology's potential for catastrophic harm. Ray Dalio said the bubble is nearing the point where it may burst because rising interest rates and increased borrowing to fund the AI infrastructure buildout create a need for cash, while strategist Joachim Klement said his core conviction is that the AI bubble will burst in 2027 or 2028. Michael Burry has taken short positions against Nvidia, Oracle, Palantir, Nebius, Micron and CoreWeave, arguing that enormous capital spending might not translate into durable returns, and Galaxy Digital CEO Michael Novogratz called it the biggest bubble of our lifetime while advising investors to ride the wave. OpenAI CEO Sam Altman said investors as a whole are overexcited about AI, and Sequoia's David Cahn put the annual gap between AI infrastructure spending and ecosystem revenue at nearly $600 billion, saying the bubble is reaching a tipping point. Anthropic CEO Dario Amodei called for slowing the pace of AI model improvements, with OpenAI's Sam Altman and SpaceX founder Elon Musk agreeing, after Anthropic insider Evan Hubinger put his personal estimate of the probability that AI could kill all humans at more than 10% within the next decade.

CoreWeave was caught in a sector-wide selloff after OpenAI cut its reported annualized revenue to $50 billion from $68 billion, a revision disclosed as a shift in accounting treatment rather than a demand slump. The restatement hit AI infrastructure stocks before a partial rebound, as traders questioned how much current AI infrastructure valuations rest on a small pool of heavyweight customers such as OpenAI. CoreWeave operates US cloud infrastructure supplying computing power to AI developers, and its US$48.8 billion market cap makes any rethink in spending by a few large customers carry outsized weight. Investors will watch how CoreWeave's reported backlog and contract mix evolve in upcoming quarters, including updates tied to its US$2.6 billion AI infrastructure loan and new deals from the Partner Network or clients like Ennoble Care. A steady or rising backlog with less revenue tied to a single counterparty would signal the business is reducing concentration risk rather than leaning further into it.

OpenAI's annualized revenue is running at roughly $50 billion, about $20 billion below the $68 billion figure that circulated in September after multiple outlets reported it as fact, and the gap is a measurement difference rather than a demand shortfall. The $68 billion figure came from a September 29 report traced to Axios and Reuters that appears to have used a gross revenue methodology counting the full dollar value flowing through OpenAI's cloud partnerships, including the portion passed through to infrastructure partners like Microsoft Azure, while OpenAI reports net revenue excluding those pass-through costs. On October 8, the Financial Times reported that OpenAI had told investors its annualized revenue was running at approximately $50 billion at the end of September, a figure CNBC confirmed the same day, with OpenAI's own disclosures to investors showing 77% total revenue growth and 107% enterprise revenue growth in Q3. The market did not wait for methodology clarification: Oracle fell 5%, with its $300 billion five-year cloud commitment to OpenAI representing roughly 45% of remaining performance obligations, Nvidia dropped 2.94% to $230.48, CoreWeave fell 8% amid insider selling reports and $3 billion in convertible debt overhang, and the Nasdaq 100 shed 300 points in thirty minutes on Thursday afternoon. Analyst consensus has converged on the word overblown, since the methodology difference does not change the fundamental demand trajectory, but the episode highlights how concentrated AI infrastructure valuations remain on a narrow set of demand assumptions from a small number of very large buyers.

Devon Energy has agreed to sell its Eagle Ford shale acreage to Crescent Energy for US$4.2b in cash, reshaping its portfolio around higher-return, longer-duration assets. The roughly 90,000 net acres are described as non-core, and management aims to lower its corporate breakeven, with net proceeds earmarked for faster share repurchases and debt reduction. Closing is expected around year end 2026, and investors will watch for any updated capital return framework. The deal headlines a morning in which US stocks are set for a softer open as inflation expectations push higher again, with median US inflation expectations for the year ahead at 3.9% for September 2026, the highest since May 2023, and Fed minutes showing most officials see a likely need for another 25 bps hike to a range of 3.75% to 4% by year end. Mortgage applications are down 4.2% and the average 30 year fixed rate sits around 7.49%, keeping pressure on borrowing costs for households and companies. Elsewhere, Vertiv reported quarterly sales up 24% and lifted its annual forecasts on AI data center demand, while CoreWeave faces a tougher backdrop for data center IPOs after an expected postponement of Nvidia backed Firmus Grid's Australian listing.

Asia Plus Securities, or ASPS, assesses that the Thai stock market has a chance of a temporary short-term recovery, supported by the yield on 10-year US government bonds falling from 5.34% to 5.23%, together with the WTI crude oil price easing to near 91 US dollars per barrel after President Donald Trump signalled that he would not yet take military action against Iran before the midterm elections on 3 November 2026. Meanwhile, the auction of 22 billion US dollars of 30-year US government bonds drew strong interest, with a bid-to-cover ratio as high as 2.54 times, above the historical average of 2.41 times. However, ASPS still advises investors to be cautious about long-term volatility, because senior Federal Reserve officials are still signalling a tight monetary policy stance to bring inflation down to the 2% target. It expects US September CPI inflation to rise to plus 3.6% year on year, from plus 3.4% in the previous month. On the AI hardware stock front, the sector faced short-term profit-taking, led by CoreWeave down 8%, Oracle down 6%, and Nvidia down 2.9%, after OpenAI reported annual revenue at the end of September of about 50 billion US dollars, below the market expectation of 68 billion US dollars, and cancelled the launch plan for its GPT-6.1 Astra model and slowed its plan to list the company on the stock exchange. Meanwhile, Taiwan Semiconductor Manufacturing Company, or TSMC, reported record-high third-quarter 2026 revenue of 1.49 trillion Taiwan dollars, above the market expectation of 1.46 trillion Taiwan dollars, driven by demand for advanced chips for AI-processing GPUs and CPUs, along with plans to raise chip production prices next year. As for the Thai stock index, it most recently fell 14 points, or 0.88%, to 1,570.61 points, pressured by the transport and logistics group, which dropped 2.80% after news of preparations to collect three tourist fees and taxes totalling 2,570 baht, combined with concerns over the September consumer confidence index, which fell for the first time in four months amid the flood crisis and diesel prices surging above 40 baht per litre. ASPS recommends a strategy of catching a relief rally in domestic play, tourism, and healthcare stocks, with five standout picks: DISNEY19, which is entering the high season for fourth-quarter earnings on the buzz around the blockbuster film Avengers: Doomsday; AAPL80, which benefits from the upcoming launch of its first foldable-screen smartphone; Bangkok Expressway and Metro Public Company Limited, or BEM, which has a high chance of winning the contract to operate the southern Purple Line electric train, combined with third-quarter 2026 earnings that are expected to hit the year's peak; Com Seven Public Company Limited, or COM7, whose third-quarter 2026 profit is expected to grow more than 30% year on year; and Bangkok Chain Hospital Public Company Limited, or BCH, whose second-half revenue from foreign patients is trending strongly higher, led by patients from the Middle East, particularly the United Arab Emirates.

Oracle and Microsoft shares declined sharply on Thursday after the Financial Times reported that OpenAI's annualized recurring revenue was significantly less than previously reported. The FT said OpenAI's annualized recurring revenue, or ARR, was approaching $50B at the end of September, citing people familiar with the matter, while Axios reported late last month that OpenAI's ARR had approached $70B. Oracle shares fell more than 6%, Microsoft fell 0.5%, and Nvidia, which has supplied chips to OpenAI and has invested in the company, fell 2%. Other artificial intelligence-linked stocks, including CoreWeave and Nebius, also saw notable declines. OpenAI did not immediately respond to a request for comment from Seeking Alpha.

Michael Burry has intensified his bearish positioning on AI, converting several stock shorts into long-dated put options as Anthropic prepares for an IPO that could value the company at more than $2T. Anthropic's confidential IPO prospectus reportedly showed revenue jumping to nearly $4.6B in 2025, roughly twelve times the prior year, alongside a net loss of about $42B and an operating loss exceeding $8B. Burry said he covered common-stock shorts in Micron Technology, Nebius Group, Caterpillar, the iShares Semiconductor ETF, CoreWeave, Nvidia, and Palantir Technologies, replacing most of them with puts extending into 2027, and swapped his Oracle short for December 2027 puts while opening a new short in MetLife using longer-dated puts. He attributed part of the repositioning to tax-loss harvesting but said the majority stemmed from weekend research that convinced him the AI bubble could burst sooner than later, prompting him to move his timelines up and seek more leverage. About $34B of Anthropic's net loss came from an accounting charge tied to the valuation of financing instruments that could eventually convert into shares rather than cash operating expenses, while the company spent $7.33B on compute and infrastructure in 2025 and disclosed $518B in future infrastructure commitments.

Analysts believe the AI sector remains undeterred and is pressing ahead with fundraising, even as the yield on 10-year US Treasuries climbs close to 5.17%, the highest since 2007. JPMorgan Chase estimated in June that companies are likely to take on an additional 4.1 trillion dollars in debt tied to AI investment by 2030. Japan's SoftBank, one of the key financiers for AI projects, raised 11.1 billion dollars this week from the sale of low-rated bonds, with its 7-year notes carrying a yield of as much as 9.75%. CoreWeave, a heavily indebted Neocloud business, said in its latest quarterly earnings report that as of June, every 100 basis point rise in interest rates could add 30 million dollars to its interest expenses. Oracle shares fell 7% this week and are down about 30% since the start of the year, after Bloomberg reported that the company sent a force majeure notice concerning its data center project in New Mexico, known as Project Jupiter, in order to shield itself from rising costs. Despite higher financing costs, demand for AI services continues to grow rapidly. Meta's Muse personal assistant app topped 2.5 million global downloads in its first two weeks and overtook ChatGPT as the most popular app on Apple's App Store. Evercore analyst Mark Mahaney said Muse could reach 100 million users within 6 to 12 months.

Michael Burry argues that the AI sector's success is now just as vital to the U.S. government as it is to the tech giants fueling the surge. The "Big Short" investor said the Trump administration has little room to let the AI boom weaken, arguing that the AI infrastructure buildout has become a critical support for the economy even as he remains bearish on several companies at the center of the trade. "Trump and his team know that the AI narrative and the buildout is the only thing keeping this economy going, and the most positive thing happening this year," Burry wrote in a recent Substack chat, as per Stocktwits, adding, "They cannot afford to let it fall," while questioning what Washington could actually do to prevent a downturn. Burry recently shorted Nvidia, Oracle, Palantir, Nebius, Micron and CoreWeave, and has repeatedly challenged the AI investment narrative, arguing that enormous capital spending might not necessarily translate into durable returns. According to the most recent disclosures, Trump made more than 1,000 trades in July, mostly in tech stocks, selling $5M to $25M each in Microsoft and Amazon before buying back smaller amounts of both, and also trading Oracle, Intuit, Marvell, Salesforce, Meta Platforms, Nvidia, ServiceNow, Workday and Adobe.

CoreWeave is launching a $3.0 billion private offering of 2033 convertible notes, plus up to $500 million of additional notes, alongside an at-the-market program to sell up to 35 million Class A shares, a combined capital raise that sent shares down 3.5% in midday trading near $80 while the S&P 500 ETF SPY rose 0.9%. Indicative terms point to a coupon of 2.375% to 2.875% and a conversion premium of 22.5% to 27.5%, and capped call transactions tied to the convertibles are intended to blunt equity dilution. The raise lands on a balance sheet already carrying roughly $72.05 billion of total liabilities against $5.02 billion of shareholders' equity at quarter end, with Q2 interest expense of $640 million and management guiding Q3 interest expense to $860 million to $940 million and full-year 2026 capex to $35 billion to $39 billion. Demand remains robust, with a revenue backlog near $104 billion as of June 30, 2026, more than $25 billion of net new customer commitments added early in Q3 outside that figure, contracted power of about 4.2 gigawatts by August 11, and a definitive 15-year anchor lease with Blockfusion for the Niagara Falls, NY AI campus. Q2 revenue grew 112% year over year to $2.6 billion, yet the company posted a $626 million net loss and negative free cash flow of $5.74 billion against $9.4 billion of Q2 capital expenditures, while analysts hold an average price target of $144 with 21 buy ratings and 5 strong buys.

Nebius Group notified customers of higher on-demand rental rates for a range of AI GPU capacity effective October 1, a rare same-week read-through on pricing power in AI compute that split the neocloud trade three ways. Nebius stock climbed 10% to $229.67 as the party setting the new price card, while IREN Limited rose 6% to $45.20 on the read-through that scarce GPU capacity can be re-rented at higher hourly rates. CoreWeave slipped 2% to $82.10, with the divergence attributed to concerns over how much of its capacity is already committed at older rates, how much debt sits against that capacity, and how fast free cash flow will turn. The Invesco QQQ Trust was up 1.62% to $716.12, while the Global X Data Center & Digital Infrastructure ETF trailed at up 1% to $27.60, a lag suggesting the diversified digital infrastructure basket is not capturing the neocloud repricing on its own. JPMorgan double-upgraded IREN to Overweight from Underweight on September 14, a call that predates this move by three sessions and serves as context rather than catalyst.

Goldman Sachs and JPMorgan expect the Federal Reserve to raise rates 25 basis points this week, with futures pricing roughly a 90% probability, a move that would hit capital-intensive AI infrastructure companies differently. CoreWeave carries direct floating-rate exposure through its newest $2.6 billion delayed-draw facility, which charges Term SOFR plus 5.50%, while it continues a 2026 capex program of $35 billion to $39 billion against a roughly $104 billion backlog. CoreWeave's own sensitivity analysis shows that, based on its June 30 floating-rate debt, a 100-basis-point increase would have added roughly $61 million to six-month interest expense, implying roughly $15 million of additional six-month interest expense from a 25-basis-point parallel increase at that exposure. IREN Limited has increasingly used fixed-rate or hedged project-specific financing, including facilities tied to contracted deployments, and its $9.7 billion Microsoft agreement and $3.4 billion Nvidia contract reduce demand risk on current capacity, but management has discussed up to $30 billion of investment by mid-2027, leaving future expansion exposed to higher refinancing costs. By Q2 2026, Insider Monkey tracked 71 hedge funds holding CoreWeave, up from 63 in Q1, with Magnetar Capital holding 52,062,927 shares after cutting 25%, while IREN rose to 69 holders from 53 as Value Aligned Research Advisors increased its position 78% to 8,467,327 shares. At the August 31 settlement, 93,610,835 IREN shares were sold short, equal to 25.01% of float, with 2.06 days to cover.

AI-related debt issuance reached nearly $500 billion by early August, about one-fifth of higher-rated U.S. issuance this year versus roughly 1% in 2024, according to Reuters Breakingviews. Meta Platforms and CoreWeave sit at opposite ends of that financing spectrum, with Meta able to borrow against its advertising cash flow while CoreWeave borrows against the build. CoreWeave ended Q2 with about $104 billion of backlog, spent $9.4 billion on capex in the quarter, and its newest $2.6 billion facility carries SOFR plus 5.50%. At the end of Q2 2026, Insider Monkey tracked 254 hedge funds holding Meta, down from 262 in Q1, while CoreWeave rose to 71 holders from 63. At August 31, 55,568,683 CoreWeave shares were sold short, 15.98% of float, with 2.66 days to cover, and CoreWeave also had $6.6 billion of 1.75% convertible senior notes outstanding across its 2031 and 2032 issues.

CoreWeave shares fell 6% Monday after Bernstein warned in an investor note that slower artificial intelligence model training could pressure data-center demand. Analyst Maidson Rezaei said facilities in rural and Tier 3 markets could face greater pressure because many were developed around training workloads that are less sensitive to network latency. Bernstein estimates about 70% of a 488-gigawatt U.S. data-center development pipeline sits in rural or Tier 3 areas, and CoreWeave holds about 25% of its active U.S. power and roughly 74% of contracted power in Tier 3 and Tier 4 markets. The firm said CoreWeave's existing backlog is largely supported by take-or-pay agreements, which may limit near-term risk, though demand for contracted capacity not yet sold could weaken if training activity slows. Equinix, Digital Realty Trust and Csquare may be less exposed because most of their capacity is in metropolitan markets; Bernstein rates CoreWeave Underperform with a $74 target and assigns Outperform ratings to the other three.

The Federal Reserve will announce its policy decision on Sept. 16, with expectations of a rate hike amid elevated inflation and CPI prices. Kevin Gordon, Head of Macro Research and Strategy at the Schwab Center for Financial Research, said a 25 basis point increase would not resolve supply issues but warned that without a monetary policy response, inflation risks running away and inflation expectations could stay elevated. He noted that PPI components mapping to PCE do not yet convince that inflation is on a durable path back to 2%. Yahoo Finance Senior Business Reporter Ines Ferré said gasoline and diesel prices are at record highs for this time of year, and noted Goldman Sachs now expects the Fed to cut rates next. Gil, speaking about client concerns, said higher rates raise the discount rate on long-duration equities, pressuring tech and growth stocks, and would make debt-financed data center buildouts by CoreWeave and Oracle more expensive, slowing the AI complex.