AI Debt Concerns Grip Market… And Bank Of America’s Rough Day 10/14/26

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Live from the NASDAQ Market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Coreweave crumbles, the NeoCloud giant seeing its worst day since February, amid mounting concerns over the AI buildout. Details on the debt and what it could mean for the broader economy. And Bank Of America tumbles after earnings in a hefty fine from regulators. What, if anything, can see O'Brien Moynihan do to turn things around for the lender? Plus, Apple joins an exclusive club. Walmart and the discount retailer shrug off a down market. And Caterpillar digs itself into a deeper hole. What is weighing on the construction giant? And what's the data center trade have to do with it? I'm Melissa Lee, coming to you live from Studio B at the NASDAQ on the desk tonight. Tim Seymour, Dan Nathan, Steve Grasso and our guest trader for the evening, Stu Kaiser, head of equity trading strategy at Citi. Stu, great to have you with us.

And we start off with the latest questions over AI financing after Coreweave's bonds fell into distressed territory. The yield on the neocloud's unsecured debt due in 2032 surging well above the 15% mark. Coreweave stock meantime closing 15% lower on the developments, even after CEO Mike and Trader chalked up the losses to markets acting irrationally. This according to a memo obtained by CNBC. The selling hit other cloud stocks hard. Oracle, which has been aggressively raising money, fell almost 9%.

Terawolf, Iron, Hut 8 and Nebius all down double digits. Earlier today on CNBC, Goldman Sachs CEO David Solomon addressed the tight AI financing environment, stressing that not everyone with a chip or data center can have unlimited capital at a very low cost. So how big a threat are these debt concerns to the AI trade, as well as to the broader market? And in terms of the broader market today, it wasn't just these stocks as a slice of the market going down, but it really took down the entire market with it, which is something a little bit different.

SPEAKER_4 (2:36)

Yeah, noteworthy unsecured debt, right? So, I mean, there's a dynamic here and we've spent a lot of time talking about who really has been underwriting what and the implied element. And, you know, our friend Gil Lorie, I think, referred to some of this debt as subprime tranche. So, in a world where we have digested an interest rate move, an interest rate move that has been extraordinary by any measure, you can argue, haven't seen anything like the third quarter in decades, the fact that you haven't really had to deal with the credit dynamics of this. Now, we're going into the most far-flung part of what has been speculation and what has been extreme enthusiasm. Let's just put it that way and the sense that there is this flood of money, that's this unlimited resource of money. Again, some of the hubris that some of this has been expressed by the management that the media has picked up on, specifically the FT, who I'm a reasonably big fan of. I think there's a quaint here that we don't need to quote the CEO. We do know exactly where there's a lot of speculation. So, we say this all the time. When you have a velocity move and rates the way we had, it's going to also have an impact from a credit perspective. We haven't even really had a credit reaction, although we've seen it begin in CCC. I think what investors more broadly today are interpreting, where is really the first sign of the credit crisis going to emerge on a day when also we had a hotter CPI.

SPEAKER_5 (4:01)

Yeah. I take it away from some of the Neo Clouds. My good friend, Jim Chanos, just hit me on this. He's like, if the Neo Clouds are trading three, four times 2028 revenue or something like that, SpaceX, which is a $2 trillion market cap, is trading at 19 times that. If you think about how much debt they just raised right after their IPO and then they just announced this $30 billion deal. I think there's 10 of some bank loaner, something like that on top of it. I mean, there are bigger problems than just the Neo Clouds. Oracle has been telling us that for over a year right now, because for some reason, investors have not been willing to give them the benefit of the doubt on how their debt-fueled build out is going to be for one customer. And that was OpenAI. I know, I think they added meta right now. But there's no guarantee that they're going to be able to build this out.