CoreWeave, a cloud services company backed by chipmaker Nvidia (NVDA), is planning to reduce the size of its upcoming U.S. IPO and price its shares below the initial expected range, according to a source who spoke with Reuters. The company now intends to sell 37.5 million shares at $40 each—lower than the $47 to $55 range it originally targeted. With Nvidia anchoring the offering through a $250 million purchase, CoreWeave could raise about $1.5 billion and reach a valuation of roughly $23 billion, which is down from the $32 billion that it had hoped for.
This IPO was being watched as a signal to whether or not investor excitement for AI startups would help revive the sluggish IPO market. CoreWeave had once aimed to raise more than $3 billion and hit a valuation of over $35 billion. But despite securing deals with major AI players like OpenAI and signing an $11.9 billion infrastructure deal with the ChatGPT maker, concerns have grown. Indeed, analysts are worried that most AI infrastructure spending is being captured by a few big companies while others may struggle. There’s also pressure from emerging competitors like China’s DeepSeek.
Adding to the skepticism, CoreWeave carries a significant debt load of about $8 billion and operates entirely on leased data centers and equipment. The company has not yet turned a profit and said it will use around $1 billion from the IPO to reduce its debt while continuing to borrow. It is worth noting that investors have been cautious about unprofitable IPOs in recent years, which is why the company didn’t get the valuation it wanted. Nevertheless, CoreWeave plans to trade on the Nasdaq under the ticker “CRWV,” with Morgan Stanley, J.P. Morgan, and Goldman Sachs leading the underwriting.
Is NVDA a Good Stock to Buy?
Although you can’t invest in CoreWeave yet, you can invest in Nvidia. When turning to Wall Street, analysts remain bullish on NVDA stock, with a Strong Buy consensus rating based on 39 Buys and three Holds assigned in the past three months. Furthermore, the average NVDA price target of $176.54 per share implies an upside potential of 56.8% from current levels.
