Lenders are getting nervous CoreWeave (NASDAQ: CRWV), a cloud company that leases artificial intelligence (AI) chips made by Nvidia (NASDAQ:NVDA). In June, CoreWeave sold $1.25 billion of unsecured notes due 2032 at face value, with a coupon of 9.625%. Tuesday October 13, the yield on these bonds would have reached nearly 15% before ending at a record around 14.5%.
A bond’s yield increases when the price falls. In other words, bond buyers are now willing to lend a lot more to CoreWeave than they were four months ago.
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The title followed on Wednesday. CoreWeave shares are down about 15% as of this writing, and Nvidia, which is both CoreWeave’s chip supplier and one of its shareholders, is down about 3% to around $221.
Should Nvidia Investors Be Worried? I don’t think so – at least not about CoreWeave itself. What Nvidia leverages directly on CoreWeave turns out to be minimal compared to what the chipmaker earns.
Image source: Nvidia.
CoreWeave’s borrowing problem
The problem with CoreWeave doesn’t seem to be demand. Showing how quickly the business continues to grow, CoreWeave’s second-quarter revenue more than doubled year over year to approximately $2.6 billion. But the company lost $49 million on an operating basis, and its net interest expense of $640 million was more than double what it was in the year-ago quarter. Its total debt stood at about $35.6 billion at mid-year.
Simply put, CoreWeave is still borrowing to buy its chips, and its operations are not yet bringing in enough money to pay its interest costs.
How well does Nvidia have CoreWeave?
The most direct link is Nvidia’s participation. Nvidia held approximately 47.2 million CoreWeave shares as of June 30, according to its latest holdings report. This position was then worth approximately $4.7 billion.
At Wednesday’s price of around $66, its value is more like $3.1 billion. And the roughly 23 million shares Nvidia bought in January, for $87.20 each, are down about 24%.
Nvidia also has a capacity agreement with CoreWeave. In September 2025, the two companies signed an order with an initial value of $6.3 billion. Under the settlement, Nvidia must purchase any CoreWeave cloud capacity that CoreWeave’s own customers are not using, through April 2032, under certain conditions.
Of course, this safety net could cost Nvidia the most if CoreWeave’s customers leave, which is unlikely to happen as revenue doubles.
Nvidia’s latest quarterly report doesn’t name CoreWeave at all. But it shows $36 billion in commitments under deals with AI cloud partners, typically lasting six years, and up to $3.5 billion in guarantees on data center leases from some of those partners. It also lists a possible maximum loss of $4.7 billion from certain stakes in infrastructure financiers (companies that help finance AI infrastructure).
Together, these items amount to about $44 billion spread over several years – and the filing doesn’t specify how much CoreWeave is involved. (The filing’s much larger guarantee, up to $105 billion on data center leases tied to an OpenAI subsidiary, is another matter.)
As a reminder, Nvidia made an operating profit of $63.7 billion in the second quarter of fiscal 2027 alone (the three months ended July 26, 2026).
Nvidia can absorb a CoreWeave problem
CoreWeave purchases could also represent a small portion of Nvidia’s sales. CoreWeave spent about $14.1 billion on property, plant and equipment in the first half of 2026, and not all of it went to Nvidia. Around the same time, Nvidia’s revenue was around $178 billion.
Even if every dollar spent by CoreWeave had gone to Nvidia, that would represent less than 8% of Nvidia’s sales.
Meanwhile, Nvidia’s profits continue to climb rapidly. Its operating profit rose 124% year over year in the fiscal second quarter, and it was up about 19% from the $53.5 billion in the fiscal first quarter.
Yes, the biggest risk doesn’t just come from CoreWeave. If lenders simultaneously pull out of all debt-funded AI cloud computing companies, orders for Nvidia chips could slow.
However, the stock is probably already expecting some slowdown. Nvidia’s price-to-earnings ratio is only around 14, based on analysts’ average earnings estimate for fiscal 2028 (Nvidia’s next fiscal year). I think that’s a low price for a company whose operating profit has just more than doubled.
Ultimately, CoreWeave’s bond prices are a good warning about how much of AI construction relies on debt. But Nvidia’s own exposure to CoreWeave is small compared to what the chipmaker earns in a quarter. I would still buy Nvidia stock at this price, but in a size suited to the high-risk nature of a growth stock like this.
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Lenders are getting nervous about CoreWeave. I would still buy Nvidia stock. was originally published by The Motley Fool
