By Adam Clark

CoreWeave was falling early on Monday as investors continued to look skeptically at the cloud-computing company's initial public offering.

CoreWeave shares were down 5% at $38.00 in premarket trading, while futures tied to the tech-heavy Nasdaq 100 index were falling 1.6. The stock closed flat at $40.00 on Friday -- its first day of trading.

CoreWeave priced its shares well below their expected range. The stock then finished the day unchanged -- usually, IPOs are priced so that shares rise on the first day as a reward for early investors.

As with any fast-growing technology company, if CoreWeave's revenue growth slows then it is at risk of being viewed as too highly priced by the market. However, analysts have also noted concerns over its concentrated customer base -- Microsoft accounted for nearly two-thirds of the company's revenue in 2024 -- and its debt load.

CoreWeave's revenue comes from cloud rentals of AI servers that use Nvidia chips. Nvidia purchased $250 million worth of its shares, at the IPO price, having already held a 6% stake in the company ahead of its listing.

"Nvidia having to save the IPO last minute supports our view that CoreWeave looks like a special purpose vehicle for Nvidia -- an off balance sheet arrangement to amplify $350 million investment into a $10 billion customer," wrote D.A. Davison analyst Gil Luria in a research note on Monday.

Luria lowered his price target on CoreWeave stock to $36 from $45, while keeping a Neutral rating on the shares.

Nvidia and CoreWeave didn't immediately respond to requests for comment on the research note early on Monday.

Write to Adam Clark at adam.clark@barrons.com

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March 31, 2025 08:28 ET (12:28 GMT)

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