CoreWeave, Inc. (NASDAQ:CRWV) is one of Jim Cramer’s favorite stocks when it comes to the data center buildout. Throughout 2026, the CNBC TV host has continuously praised the firm for its strengths in building data centers. During last week’s major AI selloff, CoreWeave’s shares were one of the biggest victims. They closed the week a whopping 25% lower, with media reports raising concerns about the yields on its debt. Cramer discussed Elon Musk’s comments on the yield and asserted that CoreWeave still had the strengths of the data center buildout:
“I think that we’re all on the situation where we’re worried about whether there’s going to be overbuilding of the data centers. Meaning that the spec guys, the Nebiuses, the IRENs come forward and they keep building. Versus the idea that if CoreWeave’s running out of capital, can’t buy any capital because rates are up. Those guys are really in trouble. I come back and say that there’s tremendous demand. And there’s also an inability to build. CoreWeave knows how to build. I think we’re forgetting the fact that not all not all builders are equal. And the reason why CoreWeave has been able to get such a break is that everybody trusts how they build. I even I think Elon Musk does, but the fact is Elon Musk’s yikes last week, the yikes that he said on October 13th, in reaction to the bond yield.”
“And you can see that last week was just the destruction of both CoreWeave and the semis. So any sort of comeback I think is going to be tested, again.”
The bonds that Cramer discussed are key, not only for CoreWeave’s narrative, but also perhaps for the narrative of the entire data center sector and the AI buildout. A bond’s yield is calculated by dividing its annual coupon payment by the bond’s price. If investors perceive that the bond’s underlying issuer, in this case CoreWeave, might be unable to remain true to its payments, they sell the bonds. Consequently, as the price drops due to the selling, the yield rises. For CoreWeave, the yield on its 2032 bond surged to 15% last week to generate shockwaves across the financial sector.
For CoreWeave, the impact of the debt was also visible in the firm’s second quarter earnings which saw its interest expense sit at $640 million to mark a significant jump over the year-ago quarter’s $267 million. Similarly, long term debt jumped to $46 billion for a 48% annual increase.
However, for the bulls, like Cramer, there are several factors to fuel the optimism. For instance, CoreWeave has a revenue backlog of $104 billion while the firm guided 158% midpoint revenue growth for its fiscal third quarter. So, while the debt and the payments might be high, the business could be sufficient to cover the costs of the expensive AI buildout. Yet, at the same time, the money that the firm is making is going straight into its expansion. During the second quarter, CoreWeave’s capital expenditure was $6.42 billion which was nearly 10 times its operating cash flow of $679 million. Not to mention, the interest payments are hitting the bottom line with net loss widening to $626 million from $290 million.
The spending hasn’t stopped Reddit from being optimistic though, since CoreWeave is part of our list of 10 Stocks That Will Go to the Moon According to Reddit.
For Nebius Group (NASDAQ:NBIS), the debate is the same. Its second quarter revenue grew by 454% annually, while annual recurring revenue (ARR) grew by 598% annually. Like CoreWeave, debt also rose. As of Q2, Nebius’ long term debt was $8.5 billion, more than twice the $4.1 billion figure at 2025 end. Similarly, second quarter capital expenditure of $5.7 billion was 11x higher than the year ago figure of 510 million. On the capex front, the firm did have breathing room since 50% to 60% of its capex was covered by prepayments from Q2 deals while overall pricing power also improved. Looking at these brief facts, does Nebius deserve a place on our list of 12 High-Flying Stocks to Invest In? Take a look!
Shifting to the valuation, hedge funds appear to prefer Nebius. Insider Monkey’s data shows that 86 funds had disclosed a stake in the firm in Q2 while the figure was 71 for CoreWeave. Nebius is also valued more richly on a price to sales basis, courtesy of a 46.30 ratio compared to 5.4 for CoreWeave. This implies that investors appear to believe that CoreWeave might have achieved all the growth that it could in the current environment – an assertion that Cramer might disagree with. Short interest as a percentage of float is 18.9% for Nebius and 19.24% for CoreWeave.
While Insider Monkey acknowledges the risk and potential of CRWV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CRWV that has massive upside potential, check out our report about the cheapest AI stock.
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