CoreWeave Stock Treads Water After Scaled-Back IPO 

Key Takeaways

• CoreWeave, an AI-focused cloud computing company, debuted on the stock market on Friday, trading at $40 a share.
• The stock fell and then recovered, ending back where it started.
• The lukewarm investor reception raises questions about demand for AI-related stocks.

Stock of the artificial intelligence cloud computing firm CoreWeave stumbled out of the gate after its initial public offering on Friday, though it recovered quickly to post small gains. CoreWeave ended the day at $40, the same price as its IPO.

The New-Jersey-based firm offers its Nvidia graphical processing unit chips for AI firms, similarly to how Amazon Web Services sells the use of its servers. CoreWeave started in 2017 as a cryptocurrency mining firm, but as the demand for GPUs shifted from crypto to AI, the company switched focus in 2021.

The IPO price of $40, aiming to raise $1.5 billion, had been lowered from the initial range of $47-$55, according to reports. “The firm’s 2024 sales were $1.9 billion and its IPO was priced at $23 billion, which would value it at 12 times 12-month trailing sales,” says Morningstar analyst Malik Ahmed Khan. “This is loosely in line with how you’d value a high-growth company. At the same time, it is materially lower than the $40 billion number floating around just a few weeks ago.”

Amid a broader slump in technology (especially some high-flying AI trade names), the lowered IPO price and initial trading raises questions about whether investors are still willing to pay a premium for AI stocks.

CoreWeave grew its revenue 730% in 2024 to $1.9 billion from $229 million the year before. This was accompanied by growth in its net losses to $863 million from $593 million in 2023.

A Test of Investor Appetite for AI

The AI stocks that drove the market upward have stalled in 2025, exemplified by Nvidia’s 17% decline this year after rising 171% in 2024. CoreWeave may be a litmus test for how much investors want AI stocks in a market that has pivoted increasingly toward more defensive picks.

Potential Risks: Concentration and Debt

The company’s sales are highly concentrated, with 62% of 2024 revenue coming from Microsoft, according to PitchBook. This links its fortunes to a firm whose stock has suffered, declining 7.2% this year.

As Microsoft builds out its own cloud computing capacity, Khan says investors should ask how much it will need outside firms like CoreWeave. He also cites CoreWeave’s balance sheet as a potential concern: “The firm carries $7.5 billion in debt, which is due by the end of next year. If you juxtapose this with the fact that the company needs to continually raise debt to finance the [capital expenditure needed for Nvidia GPUs], the balance sheet does not appear to be in a great state.”