Goldman Sachs Upgrades CoreWeave to Buy as Shares Jump 6%

CoreWeave Inc. (NASDAQ: CRWV) shares rose 6% in premarket trading Monday after Goldman Sachs raised its rating on the AI cloud provider. The move came despite a selloff in the bond market that drove yields on CoreWeave debt toward 15%. The upgrade follows a difficult week for CoreWeave, with shares losing roughly a quarter of their value as investors questioned whether the company can maintain its ambitious AI infrastructure expansion.

Goldman Sachs moved CoreWeave to Buy from Neutral, with analysts led by Gabriela Borges describing it as one of the strongest operators in the AI cloud industry. They expect the company to fund future expansion at borrowing costs only modestly above current levels. That view differs from bond-market pricing: debt CoreWeave issued in June at a yield of 9.675% was trading near 15% last week, Reuters reported. Billionaire investor Chamath Palihapitiya said on Friday’s All-In podcast that CoreWeave needs another $35 billion in borrowing to meet its existing customer commitments.

CoreWeave enters long-term contracts before borrowing to build the infrastructure required to fulfill them. Rising interest costs could therefore reduce the returns on Ben Horowitz, Andreessen Horowitz’s co-founder, called neoclouds “Rube Goldberg financial machines” on a podcast, warning that their financing arrangements are complicated. David Sacks, speaking on the same All-In podcast, took a more positive view. He said he did not see a deeper credit problem in financing the projects, and argued that CoreWeave borrows for individual projects against valuable GPUs and contracts with creditworthy customers such as Microsoft.

The 15% yield is what investors currently require to purchase CoreWeave’s outstanding bonds, rather than the interest rate the company pays. Semiconductor research firm SemiAnalysis reported a 5.9% rate on a tranche of CoreWeave financing backed by Meta in July, versus roughly 10% on its unsecured bonds at the time. The difference illustrates how financing backed by major technology customers can cost considerably less. Prediction-market traders are nevertheless assigning significant longer-term risk.

On Polymarket, traders on Monday put the odds of CoreWeave announcing bankruptcy by the end of 2029 at 29%, with approximately $270,000 traded across D.A. Davidson analyst Gil Luria cautioned last week that shareholders could lose everything if the AI spending boom weakens. Goldman Sachs, by contrast, sees CoreWeave continuing to fund its expansion while keeping borrowing costs manageable.