CoreWeave, a provider of AI cloud services, saw its stock price decline by 8% on Monday, its second day as a public company. The company’s shares opened at $39 after an initial public offering (IPO) last Friday, but failed to gain traction. Despite raising $1.5 billion through the sale of 37.5 million shares, the IPO fell short of expectations.
CoreWeave’s financial performance reflects its scaling challenges amidst rapid growth. The company reported a substantial net loss of $0.9 billion for the year, driven by soaring demand for its AI services. However, this remarkable revenue increase may not be enough to outweigh concerns about market saturation and Microsoft’s (MSFT) rumored withdrawal from data center leases.
Analysts are also scrutinizing NVIDIA’s (NVDA) significant investment in CoreWeave’s IPO, worth $250 million. Some argue that NVIDIA created a special purpose vehicle for the company to apply competitive pressure on its largest customers and create artificial scarcity. This raises concerns about the vast majority of CoreWeave’s revenue coming from MSFT and NVDA.
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Source: https://www.investing.com/news/stock-market-news/coreweave-ipo-falls-8-on-second-day-despite-nvidia-lifeline-3958016