CoreWeave stock wipeout exposes divide between AI fear and greed

CoreWeave Inc. has become caught in a tug of war between investors who see rising bond yields as a potential rally killer for the AI trade and those who think demand for computing power will make those concerns seem passe before long.

The cloud-computing services provider’s shares plunged 20% in the first three sessions of the week, including more than 15% on Wednesday, as its debt tumbled to levels that typically indicate distress. On Thursday morning, the cost of protecting CoreWeave bonds against default rose to the highest intraday level on record, while swaps priced in a more than 60% chance of a default within the next five years.