‘Nvidia needs to step up’: How will the CoreWeave rout affect the chipmaker?

Shares of CoreWeave, a major Nvidia partner in AI cloud infrastructure, have fallen more than 7% on Thursday after plunging 15% the previous day. Investors are concerned about rising debt and borrowing costs in the AI sector and are questioning the sustainability of neocloud providers’ business models following a Gartner report.

All of this could put pressure on Nvidia, report Yahoo Finance and Barron’s: the world’s most valuable company could face expectations that it will step in to reassure markets. Nvidia invested $2 billion in CoreWeave in January and now owns 47.2 million shares, representing around 10% of the company, as Yahoo Finance notes. Nvidia stock was down 2% on Thursday as of this writing after losing 3% the previous day.

“0% chance Nvidia lets CoreWeave falter,” tech analyst Daniel Newman commented on X. Nvidia is closely intertwined with CoreWeave, the best-known and most debated neocloud provider, Yahoo Finance writes.

Indeed, in January Nvidia announced an expansion of its relationship with CoreWeave. Under the deal, Nvidia invested $2 billion in CoreWeave stock, while CoreWeave committed to using Nvidia technology to build more than 5 gigawatts of AI factories by 2030. CoreWeave is also a major Nvidia customer. It buys graphics processing units, or GPUs, from the chipmaker and rents out that computing capacity to other companies, including hyperscalers such as Meta.

“Nvidia needs to step up with financing backstops for CoreWeave & the broader neocloud ecosystem,” Michael Haber, senior vice president of high yield strategy at Jefferies, wrote in a research note. “The survival & continued expansion of the neocloud ecosystem is critical to Nvidia’s growth, as hyperscalers increasingly bring chip development in-house.”

The selloff in AI and AI infrastructure stocks, now in its second day, stems from two factors, Yahoo Finance argues. First, investors continue to dump CoreWeave bonds across maturities amid fears of an AI slowdown and its implications for the company’s already vulnerable balance sheet. Earlier this week, the yield on CoreWeave bonds issued in June reached 15%, a level virtually unheard of in the primary market for new debt, Bloomberg noted. Credit-default swaps were pricing in a more than 50% probability that CoreWeave would default within the next five years, Bloomberg reported. The surge in CoreWeave’s bond yields prompted Elon Musk to comment on X: “Yikes.”

Second, research firm Gartner put out a report predicting that by 2030 “cost pressure and a lack of a differentiating business model will force over 80% of neocloud providers to cease independent operations.”

Bernstein analyst Madison Rezaei maintained her “underperform” rating on CoreWeave on Thursday. “In our view, the company's long-term business model remains economically challenged,” she wrote.

Nvidia has backstopped its partner before. Under a $6.3 billion contract disclosed in September 2025, the chipmaker committed to purchasing any unsold CoreWeave cloud capacity through April 2032 if customers do not fully use it. Analysts viewed the agreement as protection against a decline in demand for AI computing.

CoreWeave stock is up almost 60% since its March 2025 IPO, but its earnings performances have not always pleased investors. In May, for example, the stock fell almost 10% after the company warned that rising chip costs would increase capex, while its adjusted operating margin narrowed to 1% from 17%.