"Let's look at what's happening with the bond market crash. I do wanna move us crisp crisply through here, but there are some losers going on on the bond side of things, which typically we don't talk about. We're very much on the equity side, but as we transition from cash flow funded to debt funded investment cycles here, bonds and debt markets, will matter more."
"Yeah, and we'll try and do some quick hits, but I had originally not added the neo clouds to the portfolio because. I thought the hyperscalers were gonna see outstanding growth this year, that seems to be true. So it gives you a lower risk profile. They are going to rely on debt. You know, Austin, the one warning I would have for investors, you, you mentioned IREN, or earlier they announced these big deals with hyperscalers"
Bond markets are experiencing a crash that is producing losers on the debt side, increasingly important as investment shifts from cash-flow funding to debt-funded cycles. CoreWeave and other neo-cloud operators face doubts about bond viability and market belief they may default. Applied Digital is encountering difficulties selling debt. Hyperscalers secure exceptionally favorable terms in deals, reducing developer margins and exposing operators to rising debt costs. If cost of debt increases significantly, some capacity owners will struggle to make the economics work despite demand. Comparisons to 2021 revenue-chasing behavior are emerging as investors reassess risk.
Read at 24/7 Wall St.
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