Nasdaq falls 2.1% as investors worry about the debt used to pay for building SI data centers

The market is looking harder at the debt being used to build computing capacity for SI.

According to CBS News, on October 16 the Nasdaq Composite lost 573 points (2.1%) and closed at 26,140, the S&P 500 fell 1.1% and the Dow fell 0.3%. CoreWeave shares dropped 12% on the day and 24% on the week, AMD 6%, Intel 5.8%, Micron 5.6% and Broadcom 4.5%. Analyst Adam Crisafulli, per CBS, points out that neoclouds such as CoreWeave finance capital spending with debt and share issuance rather than cash flow. CBS also links the move to the discussion of Anthropic's IPO valuation and to the 5.1% yield on 10-year US Treasuries.

Sources 1

cbsnews.com

History

SI company stock sell-off amid debt concerns

7 events

Oct 23 Neoclouds CoreWeave, Nebius and IREN lost over 30% in October, CoreWeave's CDS spread passed 11%, and Solidigm canceled its IPO
Oct 22 Nasdaq falls 2.6% and the S&P 500 1.2%: SI-sector stocks drag markets down
Oct 22 Meta shares fall about 6% and the CDS spread hits a record; the filing shows about $825 billion in contract and lease commitments
Oct 16
Nasdaq falls 2.1% as investors worry about the debt used to pay for building SI data centersOpen now
Oct 15 Insurance against a CoreWeave default has risen to "distress" levels: about $100 thousand a year per $1 million of bonds, versus under $40 thousand a year earlier
Oct 14 Dell shares fall 11% and CoreWeave 15% as investors doubt the timing of enterprise SI demand and the debt load
Oct 14 Semiconductor stock index on track to lose more than $1 trillion in value amid doubts over SI infrastructure spending