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The Federal Reserve just raised interest rates for the first time since 2023, lifting its target range to 3.75% to 4%. It also hinted another increase could follow. For most companies, a quarter-point move isn’t a massive concern. But for CoreWeave (CRWV), even a small increase matters because it presses on the firm’s weakest point.
CoreWeave’s whole model runs on debt. It borrows heavily to buy Nvidia (NVDA) chips and build data centers, then rents out that computing power. The business is growing fast, with revenue up 112% last quarter. The problem is the cost of that growth. CoreWeave carries more than $51 billion in debt, which is more than its market cap itself. Its interest bill now runs higher than its operating income. Its CFO recently described the build-out as funded through debt, customer prepayments, and other capital.
