CoreWeave Inc. (CRWV) stock fell further on Thursday as investors questioned whether the artificial intelligence infrastructure company's debt-fueled expansion is financially sustainable.

The decline followed a 15.46% plunge to $65.78 on Wednesday. Meanwhile, broader technology stocks remained under pressure, with Nasdaq futures falling 1.08% and S&P 500 futures slipping 0.22%.

CoreWeave, which rents AI computing power to major technology companies, has borrowed heavily to build data centers and expand its computing capacity. However, rising borrowing costs have raised concerns about its ability to fund future growth.

CoreWeave's $52 Billion Debt Burden Raises Concerns

CoreWeave's combined debt and lease obligations reached roughly $52 billion at the end of June.

Meanwhile, net interest expense surged to $640 million in the second quarter from $267 million a year earlier.

D.A. Davidson analyst Gil Luria questioned the company's business model, noting that CoreWeave borrows at roughly 9% while generating returns of about 1%.

The gap has fueled concerns that borrowing costs could outpace returns on its massive infrastructure investments.

Higher interest rates have added to these risks, making it more expensive for debt-heavy AI companies to finance new projects.

CoreWeave Co-Founder Defends Aggressive Expansion

Despite mounting concerns, CoreWeave co-founder Brannin McBee defended the company's borrowing strategy.

McBee said the debt supports infrastructure expansion rather than reflecting weakness in its underlying business.

He also said CoreWeave is exploring cheaper financing from insurance companies to reduce borrowing costs.

According to McBee, CoreWeave would become substantially cash-flow positive if it stopped building new infrastructure today.

Meanwhile, Dan Ives of Yorkville Ives defended the broader AI spending outlook.

Ives wrote on X on Thursday that upcoming earnings from major cloud computing companies should reinforce expectations for continued AI investment rather than undermine them.

Those results could provide an important test of whether strong AI demand can support the industry's rapidly growing infrastructure spending.

He also dismissed concerns surrounding CoreWeave as overblown, comparing the market's reaction to fears of a software-as-a-service (SaaS) industry collapse earlier this year.

Technical Analysis

CoreWeave remains in a downtrend, trading 25.8% below its 20-day simple moving average (SMA), 28.7% below its 50-day SMA and 32.3% below its 200-day SMA.

Moreover, its 50-day SMA remains below the 200-day SMA following a death cross in July, reinforcing the bearish trend.

However, the relative strength index (RSI) stands at 28.84, indicating oversold conditions. While this could trigger a short-term rebound, it does not confirm a trend reversal.

Key Support: The $60.50 level remains critical, near the stock's 52-week low of $60.55. A break below this level could increase selling pressure.

CRWV Price Action

CoreWeave shares declined 4.68% to $62.70 in Thursday's premarket trading. The stock is near its 52-week low of $60.55, according to market data.