CoreWeave’s credit stress continued to spiral on Thursday amid a broader sell-off in AI-related names.

CoreWeave — a so-called neocloud company — has taken on more than $51 billion of debt and obligations to finance its AI infrastructure build-out. It’s now facing a rebellion from stock and bond investors as concerns mount about AI overspending and debt levels.

Yields on CoreWeave debt have continued to climb, with the yield to maturity on its 9.75% bond due in 2031 reaching 15.78%. Bond yields move inversely to prices. Meanwhile, the spread on its five-year credit default swaps, which are insurance against default, at one point soared above 1,140 basis points. It last stood at nearly 1,038 bps — a 16% week-over-week jump and 164% higher than a year ago.

Credit concerns are spreading into AI equities too. CoreWeave’s stock dropped during trading Thursday before recovering and closing 5.94% higher. The moved followed Wednesday’s 15.5% nosedive.

Other neocloud stocks were under similar pressure. Nebius also sank before climbing higher to close 1.29% and and Iren ultimately ended the day down less than 1%.

Anxiety about AI overspending is also spreading. For instance, shares of Micron Technology and Advanced Micro Devices sold off following a big sell-off in South Korean chip stocks. Micron closed up 1.87%, while AMD fell 1.5%.

While AI debt worries have been rising steadily, investors have suddenly grown skittish about the underlying finances of companies borrowing heavily to buy chips, build data centers, and rent out computing power.

Coreweave’s credit default swaps are one place to see that stress.

Credit default swaps are contracts where buyers pay for protection in case the borrower can’t repay its debt. The spread widening in CoreWeave’s CDS means investors view the debt as riskier.

The market is “basically saying ‘no mas’ to AI debt without operating cash flow support,” the Evercore ISI trading desk said.

A spread level of 1,000 basis points or above is generally a sign of credit distress, said Gavan Nolan, executive director of fixed income pricing at S&P Global Market Intelligence.

No one is questioning whether demand for CoreWeave’s services is real, since the company has contracts with all the big hyperscalers, Nolan said. The question is whether the cash flows will ultimately arrive.

“It’s obviously heavily negative free cash flow at the moment, and it needs that cash flow to arrive really to justify all the capex that it’s spending,” Nolan said.

‘Self-fulfilling prophecy’

CEO Mike Intrator dismissed the market moves on Wednesday, according to a memo obtained by CNBC.

“When you are building a new type of technology company there will be periods of time when the market misunderstands and acts irrationally,” he wrote. “We are confident in our backlog which more than supports all of our debt obligations.”

The backlog is over $100 billion, with around two-thirds of it with investment-grade counterparts including Microsoft, Meta, IBM and Caterpillar, Deutsche Bank said in a note Thursday. The firm reiterated its buy-rating on the stock Wednesday, calling the dislocation a buying opportunity.

“The problem is this kind of concern can prove to be a self-fulfilling prophecy, and risks triggering broader issues in other AI-related names,” said Jim Reid, global head of macro and thematic research.

Domino effects may already be happening. Oracle’s five-year CDS spread also spiked this week. It was last at 282 basis points, a roughly 10% increase in one week.

“A downgrade from its BBB rating would risk pressuring IG-only investors into forced sales,” Reid said.

Netflix on Thursday announced Bela Bajaria will be replaced as the company’s chief content officer by former Disney exec Peter Rice, effective Oct. 26.

Rice most recently oversaw Disney’s cable channels, news programming and coverage of major sporting events.

“Peter is one of the most effective at-scale operators in the entertainment industry,” co-CEO Ted Sarandos said in a statement. “I’m excited to welcome him to Netflix as Chief Content Officer as we continue to scale and deliver members more of the stories they love.”

Before Rice was at Disney, he held roles 21st Century Fox and Fox Searchlight Pictures. Netflix in its announcement called him “one of the entertainment industry’s most respected creative executives.” In his new role, Rice will oversee the company’s global content organization, including scripted and unscripted series, film and live events.

″[Netflix has] shown again and again that they’re willing to take chances on distinctive voices and fresh ideas, and I’m excited to work with the team to help bring even more great stories to members everywhere,” he said in a statement.

Bajaria, who is leaving Netflix after nearly 10 years, most recently worked as the company’s global content team. She had been focused on the company’s live sports strategy, looking to create events out of buzzy games and tournaments.

“I’m incredibly grateful for everything she’s done to help Netflix entertain the world,” Sarandos said in a statement.

The announcement comes a day after Netflix instituted layoffs across its organization, eliminating approximately 6% of its workforce, or roughly 1,000 jobs.

The media company will report its next quarterly earnings on Tuesday.

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Democratic Texas Senate candidate James Talarico raised $64 million in the third quarter, his campaign announced Thursday, setting what the campaign said is a Senate fundraising record as Republicans pour outside money into the race to bolster GOP nominee Ken Paxton in the 2026 midterm election.

The haul was the largest ever reported by a Senate candidate in the July-through-September quarter, according to the campaign, surpassing the previous record of $57 million set by South Carolina Democrat Jaime Harrison, who unsuccessfully ran against Republican Lindsey Graham in 2020.

Talarico has raised more than $134 million since launching his campaign last year, according to his campaign ahead of the quarterly filing deadline with the Federal Election Commission.

“Grassroots contributors from across Texas are coming together to end billionaire control over our politics and bring down costs for working families,” Talarico said in a statement.

The campaign said more than 1.3 million people have donated and that 97% of contributions were $100 or less. Paxton, by comparison, announced earlier this month that his campaign and two affiliated fundraising committees raised a combined $18 million during the quarter.

The candidates’ full financial picture will become clearer after their quarterly reports are filed with the FEC. The filings will show how much each campaign spent and how much cash they had left entering the final stretch.

But the gap in direct fundraising tells only part of the financial story. Republican outside groups have spent more than $175 million since Sept. 1 supporting Paxton or attacking Talarico, according to AdImpact, helping offset Paxton’s weaker campaign fundraising. Overall political advertising in the race has surpassed $500 million.

SpaceX

The source of that money matters as federal law guarantees candidates lower broadcast rates for television advertising than super PACs, allowing Talarico’s campaign dollars to go further in buying TV exposure than outside Republican groups.

No Democrat has won statewide in Texas since 1994, and the party has not won a U.S. Senate race there since 1988. But Talarico leads Paxton 48.5% to 45.2% in FiftyPlusOne’s polling average, a 3.3-percentage point advantage, forcing Republicans to devote significant resources to what has traditionally been safe territory.

Talarico’s fundraising also eclipses previous high-water marks for Texas Democrats. Beto O’Rourke raised $38.1 million in the third quarter of 2018 during his challenge to Republican Sen. Ted Cruz.