Nebius and CoreWeave Drop Amid Rising Credit-Swap Costs in AI Cloud Sector
Shares of Nebius Group (NASDAQ:NBIS) fell by 10%, while CoreWeave Inc. (NASDAQ:CRWV) dropped nearly 9% as rising credit-default-swap costs signaled growing concerns over the ability to finance high levels of capital expenditure in AI infrastructure firms. The selloff was driven primarily by surging CDS spreads, with CoreWeave's five-year default probability now at 50%. Both companies have seen significant declines—Nebius down 43% and CoreWeave down 36% over the past month. Oracle (NYSE:ORCL) also fell as its own CDS spread widened to above 215 basis points, reflecting broader concerns about leveraged AI infrastructure borrowers. Despite these losses, the First Trust Cloud Computing ETF (NASDAQ:SKYY) remained positive, suggesting that the selloff is concentrated in highly indebted names rather than a broad cloud sector downturn. NVIDIA (NASDAQ:NVDA), another key player, also fell 3% as its CDS hit new highs.
Tickers: $CRWV $NBIS $NVDA $ORCL
Topics: AI infrastructure CDS spreads leveraged companies stock selloff