Why is CoreWeave rallying so hard today?

CoreWeave (NASDAQ: CRWV) shot up 23% on Wednesday, November 11, and the reason goes beyond another strong earnings report.

For some time, Wall Street had been wondering whether the company could pull off its vast plans for AI without going under from debt costs.

Then came Tuesday’s financial results, along with new promises of cheaper funding. Suddenly, traders had a reason to reconsider their bets against the stock.

The company pulled in $3.7 billion during the third quarter, representing a 168% increase from a year earlier. Its earnings also cleared market expectations, while management increased its forecasts for 2026.

But there’s another interesting part of this story: CoreWeave apparently has more potential customers than its equipment can accommodate. CoreWeave CEO Michael Intrator told reporters:

“Demand for the infrastructure is and remains overwhelming. I think I said that we are 10x oversubscribed to the existing capacity that we have left in 2027, and we are multiples … oversubscribed on the capacity we have out in 2028.”

CoreWeave finds another way around its expensive debt problem

This is where things start to get tricky. A company providing cloud computing services using AI needs to invest huge sums of money before customers can start benefiting from their products.

These expenses have been worrying the stock market about the fate of neocloud companies, specifically CoreWeave, Nebius (NASDAQ: NBIS), and IREN (NASDAQ: IREN).

The worries were seen clearly when the cost of protecting CoreWeave’s debt from default rose above 11%. In the credit market, such prices are normally an indicator of trouble.

With its higher-risk bonds becoming more expensive, management has been looking at financing backed by individual assets rather than relying heavily on unsecured borrowing.

“Our asset level debt has basically been rock solid through this entire thing. There is an enormous demand for that product,” Michael said, adding that another investment-grade financing deal could reach investors within the next couple of weeks.

The interest rates on the new borrowings range from 7% to 7.5%, which could help reduce the cost of capital.

CoreWeave has almost $9 billion in advance customer payments and deposits. Client contracts further support the company’s financing deals.

On Tuesday’s earnings call, Michael referred to the quarter as a breakthrough for the company.

CoreWeave lifts its 2026 outlook while competitors join the rally

For the full year, CoreWeave now expects revenue of $13 billion to $13.3 billion. Analysts surveyed by LSEG had anticipated $12.86 billion.

Its projected adjusted operating income is between $1.275 billion and $1.375 billion, compared with the $1.07 billion estimate collected by Visible Alpha.

Some other AI infrastructure-related companies saw their stocks move with the excitement following Wednesday’s market open. NEBIUS gained 17%, Applied Digital (NASDAQ: APLD) 9%, and IREN 8%.

A political issue remains over the construction intentions of the industry.

Given the recent gains made by the Democrats in the midterm elections last week, some were concerned about how that might affect future policy developments regarding American data centers.

Michael dismissed those concerns, saying CoreWeave expects to complete the domestic facilities needed to satisfy its contracted backlog.

He pointed to Texas Governor-elect Gina Hinojosa, who has indicated that projects already approved and under construction can continue.

CoreWeave has also spread its facilities across different locations rather than concentrating its entire expansion in one state, reducing its exposure to individual regulatory decisions.

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