Traders Bet Against CoreWeave Amid Neocloud Stock Decline
Shares of neocloud companies, including CoreWeave (CRWV), fell sharply on Wednesday as concerns over a private credit bubble and rising debt yields intensified. The Financial Times reported that CoreWeave is targeting insurance firms for additional financing, which may have contributed to the decline. Social Capital founder Chamath Palihapitiya highlighted these risks in an X post showing CoreWeave's bonds yielding 15%, prompting Elon Musk’s reaction of “yikes.” Options trading activity surged across neocloud stocks with CoreWeave seeing over seven times its average volume, as traders bought nearly 200,000 puts. A notable trade involved the purchase of 26,000 put contracts at a strike price of $37.50 expiring in December, signaling bearish sentiment and potential hedging strategies. Market analysts suggest these trades may reflect concerns about overvaluation or margin plays to hedge correlated AI stocks. CoreWeave’s stock dropped nearly 15%, while Nebius Group and Iren also fell significantly.
Topics: AI CoreWeave Iren Nebius Group neocloud companies options trading private credit bubble