Introduction
CoreWeave, a leading AI infrastructure company backed by Nvidia, made its highly anticipated debut on the Nasdaq on March 28, 2025. The IPO, which raised $1.5 billion, was the largest AI-related listing since 1995. However, the market response was tepid, with shares closing flat at $40 after initially opening nearly 3% below the offer price. This resulted in a valuation of $23 billion on a fully diluted basis, significantly lower than earlier projections.
Despite its strong positioning in the AI data center market, CoreWeave's IPO was overshadowed by broader market downturns, investor skepticism about the company’s heavy reliance on a few key clients, and concerns about its financial sustainability. This article examines CoreWeave's IPO performance, the market context, risks, and expert opinions on the company's future.
Market Context and Investor Sentiment
The disappointing debut of CoreWeave’s IPO was not entirely unexpected given the challenging macroeconomic environment. On the day of its market entry, the Nasdaq experienced a 2.7% decline, contributing to an overall 10% drop in 2025, the worst quarterly performance since mid-2022. This downturn was largely attributed to policy shifts, including President Trump’s new tariffs on major trading partners and government cost-cutting measures, which led to rising prices, increased unemployment, and weaker consumer sentiment.
These conditions created a tough backdrop for CoreWeave's IPO, raising doubts about whether the public markets were ready for a significant AI-driven listing. The volatility also dampened hopes for a broader recovery in IPO activity, which had already struggled to regain momentum since the post-pandemic boom of 2021.
Company-Specific Factors and Risks
Rapid Revenue Growth, But Rising Losses
CoreWeave has demonstrated impressive revenue growth, with sales soaring more than eightfold in 2024 to reach $1.9 billion, up from $229 million the previous year. However, the company has also posted substantial losses, reporting a net loss of $863 million in 2024—an increase from $594 million in 2023. The rising costs of acquiring Nvidia’s high-performance GPUs and maintaining its leased data center operations have been major contributing factors.
Debt and Leasing Costs
CoreWeave’s financials also show significant liabilities. As of the end of 2024, the company had accumulated approximately $8 billion in debt. In addition, its reliance on leased data centers and equipment resulted in operating lease liabilities of $2.6 billion. To alleviate some of this burden, CoreWeave plans to use roughly $1 billion from its IPO proceeds to repay a portion of its debt.
Customer Concentration Risks
One of the biggest concerns for investors is CoreWeave’s heavy dependence on a few key clients. In 2024, 77% of the company's revenue came from just two customers, with Microsoft alone accounting for 62%. This concentration poses a significant risk, as any shift in Microsoft’s AI data center strategy could impact CoreWeave’s long-term prospects.
However, CoreWeave recently secured an $11.9 billion five-year contract with OpenAI, which CEO Mike Intrator believes will reduce single-client dependency over time. He also reassured investors that CoreWeave’s existing contracts with Microsoft remain intact, with no cancellations or withdrawals.
Expert Opinions on CoreWeave's IPO and Future Prospects
Despite the challenges, CoreWeave’s leadership remains optimistic. Co-founder and Chief Development Officer Brannin McBee dismissed concerns about an “AI bubble,” emphasizing that the company’s infrastructure is in high demand. CEO Michael Intrator acknowledged that macroeconomic factors influenced the IPO pricing but expressed confidence that once public markets gain more familiarity with CoreWeave’s operations, the company will experience significant growth.
Industry experts, however, have mixed views. Kamran Ansari, managing partner at Kapital Ventures, highlighted CoreWeave’s rapid growth but questioned the sustainability of its business model. Joe Medved, a partner at Lerer Hippeau, described the IPO’s reception as “disappointing,” citing the company's debt levels and revenue concentration as key areas of concern. He also noted that the underwhelming debut reflected broader skepticism in the IPO market, which has yet to recover from the highs of 2021.
What This Means for the AI and Tech IPO Market
The performance of CoreWeave’s IPO is being closely monitored as a potential indicator for future AI and tech listings. The AI sector remains one of the hottest investment areas, with Nvidia’s stock soaring due to the increasing demand for its GPUs. However, CoreWeave’s struggles highlight that even AI-focused companies must navigate financial risks, competitive pressures, and shifting investor sentiment.
The broader IPO market has been slow to recover, with many tech firms hesitating to go public due to volatile conditions. CoreWeave’s debut may serve as a cautionary tale for other AI and cloud computing firms considering an IPO in the near future.
Key Takeaways
CoreWeave’s IPO raised $1.5 billion, making it the largest AI-related listing since 1995.
Shares closed flat at $40, valuing the company at $23 billion.
Market conditions were unfavorable, with the Nasdaq dropping 2.7% on the same day.
CoreWeave’s revenue surged to $1.9 billion in 2024, but it reported an $863 million net loss.
The company’s reliance on Microsoft for 62% of its revenue raised investor concerns.
An $11.9 billion contract with OpenAI is expected to reduce revenue concentration risks.
Experts have mixed views on CoreWeave’s long-term sustainability.
The IPO’s lackluster performance raises questions about the AI IPO market's recovery.
Conclusion
CoreWeave’s IPO underscores both the promise and challenges of AI infrastructure companies in today’s economic landscape. While its growth trajectory is impressive, financial risks and dependency on a few major clients remain key concerns for investors. As AI continues to shape the tech industry, CoreWeave’s journey in the public market will serve as a valuable case study for future AI and cloud computing IPOs.