Cathie Wood Bought CoreWeave Two Days in a Row as Its Bonds Cratered Omor Ibne Ehsan Fri, October 16, 2026 at 9:33 AM EDT 5 min read CRWV -9.21% ARKK -3.08% MSFT -1.34% ARKW -2.55% PLTR -5.38% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
CoreWeave (CRWV) bonds fell to 80 cents as credit markets priced a 60% default probability, even while equity buyers saw sold-out AI capacity.
ARK Innovation (ARKK) bought $12M in CoreWeave shares while Microsoft (MSFT) offers AI exposure with a debt-to-equity of just 0.29 versus CoreWeave's 8.94.
CoreWeave's $640M quarterly interest expense exceeded its entire net loss, and analyst Gil Luria warns shareholders could face a complete equity wipeout if AI spending stalls.
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Cathie Wood's ARK Invest bought 188,665 shares of CoreWeave (NASDAQ:CRWV) on Wednesday, October 14, 2026. It bought another 192,566 shares on Thursday, October 15, 2026. That was the same day CoreWeave's five-year credit default swaps hit a record intraday level of 1,194.5 basis points.
So stock buyers and lenders are looking at the same company and reaching opposite conclusions, with equity buyers seeing an AI cloud provider with sold-out capacity. Credit investors are pricing in a real chance that the debt paying for that capacity never gets fully repaid.
The stock fell 15.46% on Wednesday to $65.78. It rose 5.94% on Thursday to $69.69, then slipped to $68.10 after hours. It has lost 49.95% over the past year.
The Wednesday trades are disclosed fund activity. The ARK Innovation ETF (NYSEARCA:ARKK) bought 145,319 shares, and the ARK Next Generation Internet ETF (NYSEARCA:ARKW) bought 43,346, worth about $12.4 million at the close.
ARK also sold 31,432 shares of Palantir Technologies (NASDAQ:PLTR) that day, worth about $6.3 million. The dollar value of the Thursday buy was not reported.
CoreWeave's market value is $38.44 billion, so these purchases show conviction but are far too small to hold up the price.
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A credit default swap is insurance against a borrower defaulting, priced as a yearly cost per dollar covered. Thursday's level means a more than 60% chance of default within five years. That number is derived purely from market prices.
The bonds tell the same story. The 9% notes due 2031 fell about 3.3 cents to 79.9 cents on the dollar, which drove the yield to 15.6%. The 9.75% notes due 2031 fell to roughly 78.65 cents, yielding 16.2%.
Credit markets often react first because a bondholder can earn at most full repayment plus interest, so without extra upside, lenders focus on what could go wrong.
CoreWeave owes about $52 billion in debt and leases. Its second-quarter net interest expense of $640 million exceeded its net loss of $626 million. Financing costs decide whether this business makes money, and that depends on customers paying on time and lenders willing to refinance.
Co-founder Brannin McBee supported the borrowing and said nearly all of CoreWeave's 2027 capacity was sold. That is the company's view. Sold capacity only helps if the cash comes in before the debt payments come due.
The company owes more than its stock is worth. Because of that, small changes in the business's overall value cause big swings in the share price. That explains why ARK likes the stock. It also explains D.A. Davidson analyst Gil Luria's downside case, in which shareholders "could face an equity wipeout" if AI spending stalls.
The credit picture argues for caution. Bonds near 80 cents and record default-swap prices remind us that common shareholders get paid last, after bondholders and landlords.
Thursday's bounce happened on the same day credit hit its worst level. When a stock rises while its bonds fall, we treat that as a warning.
Microsoft (NASDAQ:MSFT) carries far less balance-sheet risk than CoreWeave among AI infrastructure companies. Its debt-to-equity ratio is 0.29, compared with CoreWeave's 8.94, and it earns enough to cover its interest more than 50 times. Microsoft offers less upside but much less default risk.
If the 9% notes due 2031 climb back toward 90 cents and default-swap prices fall well below 1,194.5 basis points, lenders are relaxing. The case for the stock gets better. Until that happens, the bond market is the better guide.
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