The start-up, which provides the processing power to help develop A.I. systems, faces questions about its debt and the overall economy.

CoreWeave, a cloud computing company backed by Nvidia, priced its initial public offering at $40 per share Thursday, below its previously expected range.

CoreWeave reduced the size of its U.S. initial public offering and priced its shares below the indicated range, the company said on Thursday, dampening expectations that the listing would boost investor appetite for IPOs.

CoreWeave stock gained more than 20% in Tuesday trading, bouncing back after a rough start for the Nvidia-backed AI stock.

CoreWeave's stock plunged nearly 10% on Monday, dropping below its IPO price, raising concerns about AI-focused IPOs in a volatile market.

It’s easy to interpret CoreWeave’s lackluster IPO and muted first day of trading on Friday as bad news for the entire AI boom. But, as I’ll explain in a moment, that’s likely a mistake: many of CoreWeave’s problems are unique to CoreWeave.

One analyst says investors seem to be taking issue with CoreWeave specifically, which he views as “nothing more than a highly leveraged, off-balance-sheet arrangement for Nvidia.”

CoreWeave's push to be an AI hyperscaler amid debt challenges and declining GPU prices. See why we advise caution for CRWV's IPO investors.

CoreWeave is targeting a valuation of up to $32 billion on a fully diluted basis in its U.S. initial public offering, as the Nvidia -backed startup bets on strong demand for generative artificial intelligence.