CoreWeave stock market debut got a lukewarm reception from investors.
Its IPO raised $1.5 billion, valuing the AI company at $23 billion.
The company’s reliance on Microsoft and its founders’ stock sales raised concerns.
CoreWeave isn’t making much of a splash in its first day as a publicly traded company.
The stock opened at $39 per share, falling as much as 6% before reversing to rise about 4% to $41.59.
Investors had been eyeing the IPO as a barometer for the broader AI trade, which has struggled since DeepSeek made waves in January and as growth headwinds hurt enthusiasm for the biggest tech names. Investors and bankers had also hoped it could help thaw a market for IPOs that’s been mostly frozen in the last year.
While the stock’s first-day moves weren’t particularly notable, shares managed to eke out a gain on a day when the broader market was getting hammered by inflation and tariff fears. The Nasdaq Composite was down nearly 2.6% as CoreWeave began trading Friday afternoon.
Still, the market’s reception didn’t do much to help other AI names, with shares of chip makers and the hyperscalers leading the declines in the broader market late in the day:
CoreWeave had scaled back its IPO offering due to a continued sell-off in the broader stock market. The company sold 37.5 million shares, raising about $1.5 billion at a $23 billion valuation. It’s the largest tech IPO since 2021.
CoreWeave previously targeted a sale of nearly 50 million shares at an initial price range of $47-$55 a share. The $12 billion valuation haircut was the price to pay for the data center to go public today, as it looks to raise money to fund the buildout of more data centers.
CoreWeave builds data centers filled with Nvidia’s GPUs and then rents out the server farms to cloud hyperscalers and AI companies like Microsoft and OpenAI.
CoreWeave is facing some headwinds, Josh Brown, CEO of Ritholtz Wealth Management, said this week.
In a podcast earlier in the week, Brown highlighted that 62% of its $1.9 billion in 2024 revenue solely came from Microsoft. Recent headlines suggest that Microsoft is backing away from some of its data center commitments with CoreWeave.
Additionally, Brown highlighted that the co-founders of CoreWeave have already sold a big chunk of their stock but hold onto voting shares that give them full control of the company’s direction.
The S-1 filed by CoreWeave revealed that the company’s three co-founders sold nearly $500 million worth of stock during prior share offerings in 2023 and 2024.
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