CoreWeave Shares Drop Nearly 10% in Second Day of Trading

Michael Intrator, the Founder and CEO of CoreWeave, Inc., recently attended the company's initial public offering (IPO) at the Nasdaq Market in New York City on March 28, 2025.

CoreWeave, which specializes in providing cloud services supported by Nvidia technology, experienced a significant drop in its stock price on Monday, falling nearly 10% from its opening value. This decline brought the stock price down to below its initial public offering price of $40.

In its market debut on Friday, CoreWeave's shares opened at $39 and closed at $40. The IPO was notable as it marked the largest technology IPO since 2021 and was the first of its kind for a company focused purely on artificial intelligence, raising $1.5 billion in the process. It also stands as the largest U.S. IPO since the debut of UiPath, which raised $1.57 billion in 2021.

This public offering was seen as a crucial test for an IPO market that has largely stagnated since early 2022, largely due to inflation and increasing interest rates, which have led many investors to shy away from riskier investments.

Market Challenges for IPOs

Despite hopes that a favorable political climate, following President Donald Trump's election, would invigorate the IPO market, recent economic uncertainty has left many investors skeptical. As a result, the tech-heavy Nasdaq Composite has dropped by more than 10% year-to-date. However, CoreWeave is among a growing number of technology-related firms that have submitted plans for public offerings, including companies like Klarna and StubHub.

Initially, CoreWeave aimed to price its shares between $47 and $55, which would have potentially raised approximately $2.5 billion if reached at the midpoint. However, the company ultimately reduced its offering from 49 million shares to 37.5 million due to market conditions.

"There's a lot of headwinds in the macro economic environment," said CEO Michael Intrator during an interview on CNBC's 'Squawk Box' on Friday. He noted the need to adjust the transaction size in accordance with buying interest in the market.

CoreWeave's Business Model

CoreWeave is in the business of renting out access to a substantial number of Nvidia graphics processing units to major tech and AI companies such as Meta, IBM, and Cohere. One of its key customers is Microsoft, which accounted for 62% of CoreWeave's revenue last year. Competing companies in the same space include Amazon, Google, and Oracle.

The company, originally founded as Atlantic Crypto in 2017, began its journey in providing infrastructure for Ethereum cryptocurrency mining. But as digital asset prices fell, it shifted gears, acquiring additional graphics processing units and transitioning its focus toward artificial intelligence.

In a prospectus filed earlier this month, CoreWeave reported that its revenues grew by over 737% last year, reaching $1.92 billion. However, it also indicated a net loss of $863 million during the same period.

CoreWeave, stocks, IPO