CoreWeave (CRWV) stock jumped as much as 11% on Tuesday after the Nvidia-backed (NVDA) company secured $8.5 billion in financing to expand its artificial intelligence cloud platform.
The loan is the first of its kind, CoreWeave said, as it achieved investment-grade ratings from Moody’s and DBRS for financing backed by artificial intelligence hardware, such as Nvidia graphics processing units (GPUs). CoreWeave said the facility is designed to enhance access to low-cost capital, helping it meet customer demand.
The incremental term loan will enable CoreWeave to initially borrow $7.5 billion, with the option to borrow an additional $1 billion as it builds out AI infrastructure.
The loan facility brings CoreWeave’s total equity and debt financing commitments over the past year to $28 billion.
“This reflects confidence in AI adoption and represents continued market validation of our model that is proving both repeatable and scalable, enabling us to meet accelerating demand from our customers,” said Brannin McBee, chief development officer and co-founder of CoreWeave.
The financing is critical for CoreWeave, which expects to double capital expenditures this year amid increasing competition from hyperscalers such as Amazon (AMZN) and Microsoft (MSFT).
CoreWeave’s stock has been sliding over the past month and is down over 60% from its highs reached last summer. CEO Michael Intrator told Reuters in late February that the company’s planned capital expenditures of $30 billion to $35 billion in 2026 would put pressure on margins, with Q1 serving as “the low point.”
Markets have been punishing growth companies for their capital expenditures — for either spending too much or too little — as the artificial intelligence boom shifts into a “show me” story for analysts.
While the CoreWeave’s revenue backlog surged to $66 billion at the end of last year as demand for AI remained strong, investors have also become worried about risks to that revenue if the company is unable to meet its delivery obligations or bring data centers online in time.
“CoreWeave remains hyper focused on three key pillars: scale, cost of capital, and risk mitigation,” Deutsche Bank analysts wrote in a note last week after meeting with executives. “With capex being success based and backed by signed contracts, the business remains confident in securing financing as needed.”
CoreWeave’s stock has doubled since it went public almost exactly one year ago.
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