CoreWeave credit spreads spike as Nvidia defends company
CoreWeave’s five-year credit default swaps hit a record high, implying a bankruptcy probability over 60 percent. Nvidia CEO Jensen Huang stated a rescue is not needed, while analysts point to strong demand and rising chip rental prices.
CoreWeave bonds faced massive pressure, with five-year credit default swaps hitting a record of nearly 1,200 basis points, implying a bankruptcy probability of over 60 percent. Nvidia CEO Jensen Huang defended CoreWeave, stating a rescue by Nvidia is not needed and calling it a central bank for the AI sector, despite Nvidia holding a 10 percent stake. Stan Ives published a study titled 'CoreWeave Fears Overblown,' arguing the credit market ignores demand. CoreWeave had $104 billion in orders at the end of June, with an additional $25 billion added since. Ives noted that if hyperscalers cut investments or chip rental prices crash, his view would change.
However, data from Silicon Data shows H100 chip rental prices rose from $1.86 per hour in February 2025 to $2.85, a 50 percent increase, indicating compute scarcity. CoreWeave stock reversed from a 9.5 percent loss to a 6 percent gain during the day. Stan Ives argues that CoreWeave's credit risk is overestimated because the market focuses on financing costs while ignoring strong demand, evidenced by rising chip rental prices.