JPMorgan’s latest report says concerns about AI cloud infrastructure provider CoreWeave’s debt and cash burn are overblown. Although CoreWeave’s shares fell about 20% last week amid its substantial debt load and efforts to raise new capital, JPMorgan analysts including Samik Chatterjee believe its financing needs stem from rapid expansion, not poor project economics. The report estimates that a typical five-year “take-or-pay” contract has an unlevered internal rate of return of about 15%, above the company’s 9% to 11% blended cost of capital. While each additional 1 GW of capacity requires more than $35 billion in upfront capital expenditures and could generate $10 billion to $15 billion in annual revenue at full utilization, CoreWeave may not be able to fund its expansion with operating cash flow until 2030.

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