CoreWeave, an AI infrastructure company backed by Nvidia, made its muted debut on the Nasdaq on Friday, with shares closing flat after opening nearly 3% below its initial offer price. The debut gives the company a fully diluted valuation of $23 billion, but the lackluster performance has raised concerns about the broader market’s appetite for IPOs, especially amid tariff uncertainties and a turbulent equity market.
The stock opened at $39, below the IPO price of $40, and closed with little change. This followed a challenging pre-IPO process, where CoreWeave downsized its offering. The company is part of the AI infrastructure wave, providing access to data centers and Nvidia chips, which are in high demand for developing AI applications.
Despite these promising prospects, concerns about long-term growth and risks in a volatile market persist. CoreWeave’s heavy reliance on major clients like Microsoft, which accounts for a significant portion of its revenue, has drawn attention, especially with the uncertainty surrounding Big Tech’s AI investment strategies and competition from cheaper AI solutions like China’s DeepSeek.
CoreWeave’s IPO raised $1.5 billion, with Nvidia contributing a $250 million order. The company has secured a substantial contract with OpenAI, valued at $11.9 billion, to reduce customer concentration risks. However, CoreWeave faces challenges due to its capital intensity, debt load, and reliance on leased data centers.