HSBC warns that CoreWeave’s AI infrastructure spending could accelerate value destruction

HSBC expects CoreWeave to fall further as the cloud infrastructure provider’s debt burden grows and concerns increase that revenue linked to artificial intelligence may slow.

The bank rates the stock Reduce and has a $39 price target, implying 36% downside from Monday’s close. “CoreWeave earns an average 2026–30 estimated return on invested capital of 8.9%, below its cost of borrowing,” analyst Abhishek Shukla said in a client note Monday. “The more the company invests with this return profile, the more value it destroys.”

CoreWeave shares fell more than 25% last week as investors grew concerned about the company’s heavy borrowing to fund its AI infrastructure initiatives. The company has taken on more than $51 billion in debt to finance its build-out.

Credit-default-swap spreads for CoreWeave, a measure of the cost of insuring against a potential default, reached distressed levels last week. The stock was down more than 21% over the previous five trading days.

HSBC believes the decline could intensify, particularly as neocloud companies continue to face weaker spending linked to large language models. “Debt-market concerns, along with moderating large-language-model revenues, are exacerbating structural concerns for neoclouds,” Shukla wrote.

HSBC’s view contrasts with Wall Street consensus. Of the 45 analysts covering CoreWeave, 32 have a buy or strong-buy rating, according to LSEG data.

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