(Bloomberg) — CoreWeave Inc. fluctuated between gains and losses in its market debut after the cloud-computing provider raised $1.5 billion in a downsized initial public offering.
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The company’s stock opened at $39 each on Friday, 2.5% below the $40 per share initial public offering, before closing at the same price it sold shares to investors. The cloud-computing provider sold 37.5 million shares at $40 apiece, down from an initial plan of 49 million shares at $47 to $55 each that might have raised as much as $2.7 billion.
Nvidia Corp., an existing investor in CoreWeave, anchored the share sale with an order of about $250 million, a person with knowledge of the matter told Bloomberg, asking not to be identified because the information was private. Representatives for Nvidia declined to comment.
Half of the shares sold in the IPO went to the three largest investors in the deal, other people familiar with the matter said. The top 15 investors in the IPO took 90% of the shares, the people said, asking not to be identified because the information isn’t public.
Without the support of Nvidia, the IPO “wouldn’t have closed,” Chief Executive Officer Michael Intrator told Bloomberg News in an interview. “If 27 others didn’t show up, it wouldn’t have closed,” he said, speaking after the IPO was priced at a volatile time for markets.
Investors have been dumping riskier assets as they grapple with tariff risks and inflation fears. The tech-heavy Nasdaq 100 slumped more than 2.5% on Friday, pulling it back 13% from a record last month.
Led by Intrator, CoreWeave was started in 2017 as a crypto mining firm. It was an early adopter of Nvidia’s graphics chips for data centers, getting ahead of a wave of demand for powerful processors to run AI applications. It’s building out data centers based on Nvidia’s chips to offer AI-related computing.
More than three quarters of CoreWeave’s 2024 revenue was generated by business with its two biggest customers, one of which was Microsoft Corp. This high concentration, coupled with the company’s elevated debt and spending levels, has raised questions among some analyst about how sustainable CoreWeave’s growth path is.
“CoreWeave is the largest in the new neocloud category, but we see it mostly as a highly levered way for Microsoft to offload less desirable workloads and Nvidia to leverage a small investment into a very large customer,” D.A. Davidson & Co. analyst Gil Luria wrote this week. “This structure may continue to work as long as demand for AI continues to grow exponentially.”
