Aswath Damodaran, the NYU Stern professor known as the “dean of valuation,” criticized lenders financing the AI infrastructure boom, citing CoreWeave Inc. as a case study in broken credit discipline. Speaking on the Fixed + Floating credit podcast, Damodaran argued that lenders to AI data center companies have “lost the script” by pricing debt off equity narratives rather than current cash flows. He labeled private credit lenders as “sheep” for following equity trends without proper risk assessment.

Damodaran’s core argument is that private credit, not equity, faces the biggest loss if the AI build-out re-prices. He explained that equity holders capture the upside if the story succeeds, while lenders only receive their coupon. If the narrative fails, lenders absorb the losses. He compared this to shale oil companies that borrowed at $120 a barrel and struggled when prices fell to $60.

CoreWeave’s Financials

CoreWeave reported long-term debt of roughly $22.65 billion as of the first quarter of 2026, according to its Q1 earnings report. The company’s net interest expense climbed to $536 million in the quarter, up from $264 million a year earlier. The GAAP net loss widened to $740 million from $315 million.

Debt Pricing and Ratings

The shift in CoreWeave’s borrowing costs reflects the rapid adoption of the AI story by lenders. In 2023, the company’s debt priced at roughly 15%, a rate typically reserved for risky equipment loans. By March 2026, CoreWeave secured an $8.5 billion facility at an implied cost of less than 6%, receiving an investment-grade rating from three agencies.

The new debt is backed by long-term offtake agreements from Meta Platforms Inc. and Microsoft Corp., which facilitated the investment-grade rating. Damodaran argued this represents lending against narrative, as the contracts are valuable today but expose lenders to risk if AI demand slows or hyperscalers renegotiate.

Market Sentiment

Prediction markets reflect similar anxiety regarding the AI sector. The “AI Bubble Burst by Dec. 31, 2026” contract is trading at roughly 19% on Polymarket, with $2.9 million in total volume. The market spiked toward 30% in May before declining in June. Damodaran also referenced the recent SpaceX IPO, dismissing its $26 trillion total addressable market claim as “fiction,” a sentiment he believes will influence the pricing of OpenAI and Anthropic upon their public debuts.

CoreWeave Inc shares rose 4.58% to $105.50 in premarket trading on Thursday, driven by a blowout earnings report from Micron Technology. Micron’s strong performance has fueled renewed investor confidence across the artificial intelligence infrastructure sector, providing a positive tailwind for CoreWeave as the broader market reacts to sustained AI expansion.

Micron Technology posted revenue of $41.46 billion for the third quarter of fiscal 2026, beating analyst estimates of $35.59 billion and marking a 346% increase year-over-year. Adjusted earnings reached $25.11 per share, outperforming the projected $20.63 per share. The semiconductor company generated $25.39 billion in operating cash flow and $18.3 billion in adjusted free cash flow, while capital expenditures totaled $7.1 billion.

Looking ahead, Micron raised its fourth-quarter revenue guidance to $50 billion, plus or minus $1 billion, significantly above Wall Street expectations of $42.95 billion. The company also projects fourth-quarter adjusted earnings of $31 per share, plus or minus $1, beating estimates of $25.50. Micron’s board declared a quarterly dividend of 15 cents per share, payable on July 21 to shareholders of record as of July 6. Micron shares rose 8.39% in after-hours trading to $1,135.80.

Micron Q3 Performance

CRWV Technical Levels

From a trend perspective, CoreWeave is still trying to stabilize after a choppy stretch. The stock is trading 1.3% below its 20-day SMA ($107.58) and 4.9% below its 50-day SMA ($111.65), which keeps near-term overhead supply in play. At the same time, the stock remains 7.5% above its 100-day SMA ($98.77) and 5.5% above its 200-day SMA ($100.65), suggesting the longer-term base is still holding.

Momentum is improving on the MACD, as it is above its signal line and the histogram is positive. However, the 20-day SMA remains below the 50-day SMA, a bearish alignment that bulls generally want to see reversed. Key levels are defined by the stock’s $63.80 to $183.98 52-week range. Key resistance is identified at $125.00, while key support stands at $103.00.

CoreWeave Business Model

CoreWeave is a modern cloud infrastructure company that offers Nvidia GPUs and other essential AI hardware with optimized efficiency to handle demanding AI training and inference workloads. Its cloud platform supports the development and use of foundational large language models and the delivery of next-generation AI applications. This positions the company within the "picks-and-shovels" buildout for AI, where access to high-performance compute is critical for model training and deployment.