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CoreWeave prices IPO lower than expected, and its stock still sags on its debut - SiliconANGLE

Mar 28, 2025 - siliconangle.com
CoreWeave Inc.'s initial public offering (IPO) faced challenges as its shares fell over 5% on debut, despite reducing the offer size and pricing shares at $40, lower than the initially targeted $47-$55 range. The cloud computing infrastructure company raised $1.5 billion, valuing it at approximately $19 billion, but concerns about its reliance on major customers like Microsoft and Nvidia, its significant debt, and the need for substantial capital investment have raised investor apprehensions. Additionally, a report suggesting Microsoft might be scaling back commitments further fueled doubts about CoreWeave's long-term sustainability.

The IPO is seen as a significant test for the tech market's readiness for new stock offerings, amid macroeconomic uncertainties and a cautious investor climate. While some analysts see potential in CoreWeave's AI-focused business model, many investors remain skeptical about its ability to maintain a competitive edge. The broader tech industry is closely watching CoreWeave's performance, as it could influence the trajectory of upcoming IPOs in a market that has been largely dormant since 2022.

Key takeaways:

  • CoreWeave Inc. priced its IPO shares at $40, lower than the initially targeted range of $47 to $55, and reduced the number of shares offered from 49 million to 37.5 million.
  • The company raised $1.5 billion in its IPO, valuing it at approximately $19 billion, but its stock fell more than 5% on its debut.
  • CoreWeave faces concerns over its reliance on two major customers, Microsoft and Nvidia, which account for a significant portion of its revenue, and its substantial debt levels.
  • Despite the challenges, there is still potential for CoreWeave as a dedicated AI cloud platform, but it needs to address investor concerns and find the right market positioning.
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