From The Motley Fool · TMF Breakfast News · · 1m 30s
AI Stocks Drop as Bond Yield Spikes
AI stocks fall after CoreWeave's bond yield hits 15%.
In brief
AI stocks fall after CoreWeave's bond yield hits 15%. AI stocks dropped 3% as CoreWeave's bond yield spiked to 15%. Originally reported by The Motley Fool.
Inflation and a 15% Bond Yield Hit AI Stocks
Nvidia and Broadcom dropped over 3% as hot inflation dragged down the broader market.AI stocks took an extra hit when a viral chart on X showed yield on bonds issued by CoreWeave spiking to 15%.
“yield on bonds issued by coreweave, which borrows to buy nvidia chips and rent them out, spiking to 15%”
CoreWeave Debt Hits $52 Billion
CoreWeave's debt reached about $52 billion by June, up from about $15 billion a year earlier.
“CoreWeave's debt had reached about $52 billion by June, up from about $15 billion a year earlier.”
Skeptic's Math: Debt Could Wipe Out Shareholders
D.A. Davidson analyst Gil Luria warns that high debt costs could wipe out shareholders completely if AI demand cools down.
“If ai demand cools down, he warns, high debt costs could wipe out shareholders completely, leaving the company's equity worth zero.”
BlackRock Downgraded Stocks to Neutral
BlackRock downgraded U.S. stocks to Neutral on Tuesday, saying they were taking profits around the AI buildout.
“BlackRock (BLK) downgraded U.S. stocks to Neutral on Tuesday. Its strategists said they were taking profits around the AI buildout.”
TSMC Beat Earnings But Stock Slipped
Taiwan Semiconductor Manufacturing beat earnings expectations with a 41% surge in year-over-year revenue but its stock still slipped in pre-market trading.
“Taiwan Semiconductor Manufacturing (TSM) beat earnings expectations on Thursday with a 41% surge in year-over-year revenue and a raised fourth-quarter forecast, yet its stock still slipped in pre-market trading.”
JPMorgan Missed Profit Estimates But Rose
JPMorgan Chase missed profit estimates but its stock rose as its core lending business hit a new high.
“JPMorgan Chase (JPM) missed profit estimates and rose anyway. Its core lending business hit a new high, and management raised its lending-income forecast for the year.”
Gasoline Prices Up 9.1% in September
Gasoline averages $4.34 a gallon, up 9.1% from $3.08 a year ago, driving most of the latest inflation numbers.
“Gasoline averages $4.34 a gallon, up from $3. 08 a year ago. Pump prices rose 9.1% in September. That spike drove most of the upside in the latest inflation numbers.”
Neutron Rocket Delayed to 2027
Rocket Lab delayed Neutron's first flight to 2027 due to manufacturing voids in the propellant dome.
“Rocket Lab (RKLB) said Neutron's first flight slipped to 2027. The trouble is a part called the propellant dome. Its manufacturing process left voids, or small gaps, in the carbon composite layers.”
The short version
AI stocks dropped 3% as CoreWeave's bond yield spiked to 15%.
