CoreWeave stock bounced around before rallying Wednesday, adding to a 40% gain on Tuesday. The volatility comes after the Nvidia-backed AI stock launched a downsized IPO late last week and slumped in trading Monday.
CoreWeave stock was last up more than 7% at 56.75 in recent action on the stock market today. Shares gained as much as 23% earlier in the day before retreating to negative territory for some trades and then recovering.
This is the company's third full day of trading. Shares soared 42% on Tuesday, rebounding from a 7% slide on Monday. CoreWeave completed a downsized initial public offering late Thursday. The cloud-computing company listed 37.5 million shares at $40 apiece, after initially targeting a sale of 49 million shares priced between $47 and $55.
It is not unusual for IPO stocks to trade with volatility early on. As an AI infrastructure startup with backing from Nvidia, CoreWeave's IPO was among the most hyped expected new offerings entering the year. But CoreWeave arrived on the Nasdaq at the same time concerns about tariffs are weighing on the overall market. Tech stocks are facing additional questions about the sustainability of AI-driven cloud demand.
Those concerns contributed to the downsizing of the deal. But there are other factors that could be contributing to the volatility so far this week.
"In the first few days of trading I would expect CRWV to be added to various AI baskets which are very prominent right now," D.A. Davidson analyst Gil Luria told IBD in an email. "Given the very small float, any additions to demand can create large swings in the share price."
CoreWeave Stock:
Luria initiated coverage of CoreWeave stock with a neutral rating last week. One risk is that Microsoft — which also offers AI cloud computing services — accounted for 62% of CoreWeave's $1.92 billion in 2024 revenue. The company also lost $863 million last year, driven by the high up-front costs of launching data centers dedicated to AI.
CoreWeave reached a reported $11.9 billion deal to provide cloud infrastructure to OpenAI in March. The deal could reduce CoreWeave's reliance on Microsoft.
Luria wrote last week that CoreWeave's AI cloud strategy will work "as long as demand for AI continues to grow exponentially."
However, Luria added, "if Microsoft ceases to need overflow capacity and/or OpenAI is not able to raise the $11.9 billion it is committed to, CoreWeave's growth path may not be sustainable."
Separately, CoreWeave announced Wednesday that it had achieved a new industry benchmark for AI inference speed with Nvidia's Grace Blackwell computing chips. Inference refers to the process of running data through trained AI models.
Other AI stocks were mixed Wednesday ahead of President Donald Trump's expected tariffs announcement. Nvidia stock was down a half-percent at 109.66. Microsoft was down a fraction at 380.43 in recent action. Nebius Group, an AI cloud rival to CoreWeave, was up 5% at 23.84.
