Investor Flags This As 'Big Test' for Nvidia Stock As Jensen Huang-Led Company Loses Over 21% In 2025

Nvidia Corporation NVDA, a major player in the AI industry, is facing a significant market challenge following the public debut of cloud computing firm CoreWeave CRWV.

What Happened: An investor known as Bluesea Research has voiced concerns over the impact of CoreWeave’s IPO on Nvidia. The investor believes that the result of the IPO will be a "big test for Nvidia and the entire AI industry." Bluesea Research also cautioned that a substantial correction from CoreWeave’s $40 IPO price target could negatively affect sentiment toward Nvidia’s stock, reported Business Insider.

CoreWeave, a significant client and investor for Nvidia, recently went public. By late 2024, Nvidia had provided CoreWeave with more than 250,000 GPUs and owned a 6% stake in the company.

Despite Nvidia’s robust fundamentals and its role in propelling the AI trend, its stock has seen a decrease of about 19% this year. This drop is linked to worries over a potential slowdown in spending and larger geopolitical issues.

CoreWeave has already lowered its IPO price target by over 25% and decreased the size of its offering by 23.5%. Bluesea Research sees these moves as signs of a potential decrease in AI capex investments in the near future.

Why It Matters: CoreWeave’s IPO has been one of the most anticipated in recent years, backed by Nvidia. However, the IPO priced below the expected range of $47 to $55 and closed its first day at $40, equal to its IPO price. The company, despite generating $1.9 billion in revenue last year, remains unprofitable and carries $7 billion in debt. This led to a challenging IPO, with the company settling for $1.5 billion instead of the initially aimed $2.7 billion.

Despite the IPO slump, Cathie Wood-led Ark Invest made notable trades in CoreWeave. The ARK Next Generation Internet ETF purchased 98,159 shares of CoreWeave.

Meanwhile, analyst Kevin Green from Charles Schwab explains that CoreWeave’s weak IPO highlights a broader “degrossing” trend, where investors reduce exposure to high-valuation stocks like Nvidia after strong gains. Green also suggests that despite a plateau over recent months and a short-term pullback, Nvidia's longer-term three-year uptrend remains intact.

The performance of CoreWeave’s IPO and the subsequent market reactions provide a crucial context to Nvidia’s current market test and the broader AI industry’s investment climate. Jensen Huang‘s NVDA stock has fallen over 21% in 2025 so far, according to data from Benzinga Pro.

Benzinga's Edge Rankings highlight strong momentum and growth rankings for Nvidia in the 77th and 95th percentiles, respectively. Curious how other stocks stack up? Click here to uncover growth and momentum scores for top stocks.