Earlier today, software infrastructure company CoreWeave (CRWV) announced a $1.75 billion bond offering, which was an increase from the originally planned $1.5 billion. Interestingly, these senior notes will mature on February 1, 2031, and carry an interest rate of 9%. In addition, the notes will be guaranteed by some of CoreWeave’s wholly owned subsidiaries. The deal is expected to close on July 25, 2025, and the firm plans to use the money for general business purposes, such as paying down debt and covering the costs related to the offering.
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Unsurprisingly, this move is part of the company’s aggressive growth strategy. Indeed, in May, CoreWeave announced a separate $2 billion debt offering. More recently, it revealed a $6 billion plan to build a major AI data center in Pennsylvania. These actions demonstrate just how focused CoreWeave is on quickly scaling its infrastructure in order to meet the rising demand for AI services. It is also worth noting that the company’s biggest customers include OpenAI and Microsoft (MSFT), which are both major players in artificial intelligence and have the resources to enter into large contracts.
Still, some investors are worried about CoreWeave’s growing debt pile and whether the demand for AI services will continue to justify such a rapid expansion. In response, CEO Michael Intrator has defended the company’s aggressive spending in the past by saying that it is in response to the significant demand from its top clients.
Is CRWV a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on CRWV stock based on four Buys, 15 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average CRWV price target of $99.72 per share implies 23.2% downside risk.
