Shares of CoreWeave (CRWV) traded for the first time in the company’s Wall Street debut. The long-awaited IPO traded hands early Friday afternoon in what is best described as a shaky capital market.
A cloud computing provider specializing in GPU-accelerated AI infrastructure, CoreWeave saw tepid demand for its highly publicized IPO underscoring the notion that timing is critical in the IPO market. But the broader message has implications for AI giants like Microsoft and NVIDIA.
Rising economic-related concerns revolving around tariffs and inflation have put growth concerns on the front of investor’s minds and actions.
This was evidenced by CoreWeave’s last-minute struggles to price the highly anticipated offer.
Originally expected to post a price range between 47 and 48 dollars, Core weaves final offering price for the 8% float of the company’s stock dropped to $39. That price was lower than even anticipated on Thursday afternoon as investment bankers rushed to fine-tune demand.
The last-minute price shift followed news from Microsoft earlier in the week that they were scaling back demand for data center growth. In 2023, Microsoft accounted for 35% of CoreWeave’s revenue. In 2024, that number rose to 62%.
NVIDIA, who has a $25 billion stake in CoreWeave also attributed 15% of Core Weaves 2024 revenue.
CoreWeave’s poor performance is likely to have a trailing effect on other IPOs set to price into the market in the near future. Some of the larger names include StubHub, which filed for their IPO one week ago on March 21.
From a broader perspective, the lackluster IPO will set the stage for further questions regarding the market and more specifically the valuation of AI stocks.
The Magnificent seven stocks head towards their last day of trading for the first quarter down an average of -12%. The drop represents the worst first quarter of the year since 2022, the last long-term bear market for stocks.
