Blackstone's Jon Gray says CoreWeave can weather its financing pressure

Blackstone chief operating officer Jon Gray said Thursday that CoreWeave can find a way through the financing pressure weighing on the AI data-center company, arguing that its underlying business remains strong.

Speaking to CNBC's "Squawk Box" in an interview, Gray pointed to the company's leadership as a reason for confidence. "Some of these companies have very talented CEOs. CoreWeave is a good example of this," he said. "They'll find a way through it, but that's the challenge they face. The underlying business is actually quite strong."

The comments came after a difficult stretch for CoreWeave. The company's stock sank 3.55% on Thursday and is down 14% over the past week, while yields on its bonds rose and spreads on its credit default swaps widened, as investors grew nervous about how it will keep financing its data centers and at what cost. CoreWeave carries roughly $51.6 billion in total debt, including about $35 billion in notes, bonds and loans.

Gray said demand for computing power is strong, a trend he sees across the private companies Blackstone holds, while supply remains constrained.

"For the neo clouds, if they can get to the other side, the pricing of compute is up 50%," he said, adding that their legacy chips are worth more than people thought and that their data centers are leased below market.

Mixed quarter at Blackstone

Gray spoke after Blackstone reported third-quarter results that came in mixed. Revenue of $3.22 billion fell short of the $3.28 billion analysts polled by LSEG had expected, while adjusted earnings of $1.32 per share topped the $1.26 consensus estimate. Blackstone's stock rose 4% on Thursday, the same day CoreWeave's shares fell.

Gray described it as "a challenging quarter with markets," citing high energy prices and rising Treasury yields, but said the firm delivered for its clients. "Across the board, our flagship strategies beat comparable public market indices and that's what we care most about," he said.

He said he expects a strong fourth quarter and 2027 despite cross-currents including the rising cost of capital, government deficits and some crowding out of capital caused by the AI infrastructure build, pointing to underlying economic and earnings strength.

Gray also said he expects initial public offerings to resume once the market and geopolitical situation calm, and that investors need patience.

"We have a long-term approach, and we feel very good about where we position capital for our investors, the growth of those companies, the growth of those assets, and that's what gives us confidence," he said. "At some point, the wider window will open, and when that happens, we and others will sell even more."

Source: CNBC Top News.