CoreWeave's 'Tough' IPO: A Warning Sign For AI Investors? Expert Flags Microsoft's Rejection

As CoreWeave Inc. (NASDAQ:CRWV) closed at its exact initial public offering price of $40 apiece on Friday, this analyst highlights the challenges for the “tough” IPO, stemming from several reasons, including the reduction in artificial intelligence spending by companies in 2025.

What Happened: Dan Niles, the founder and portfolio manager of Niles Investment Management, described the CoreWeave IPO as a “tough” one as it closed at the exact IPO price on its listing day. He said in an X posy that a solid deal is one where the stock is up 15-30% from its IPO price on the opening day of trade.

According to Niles, the AI cloud infrastructure company closed at the IPO price because it was backed by Nvidia Corp. (NASDAQ:NVDA). The chipmaker, led by Jensen Huang, is a 6% investor and contributes at least 15% to CoreWeave’s revenue. However, Niles wasn’t convinced that Microsoft Corp. (NASDAQ:MSFT), which contributes to 62% of CRWV’s revenue, did not invest $12 billion for extra capacity.

“What is more troubling to me is the news story that $MSFT, a 62% customer of Coreweave, turned down a $12B option for more ...