Shares of CoreWeave, Inc. (CRWV) plummeted 5.02% in Thursday's trading session, marking a significant pullback for the artificial intelligence (AI) infrastructure company that has seen its stock soar in recent weeks. The decline comes as analysts initiate coverage and investors grapple with concerns over the company's rapid rise and potential risks.

Citizens JMP initiated coverage of CoreWeave with a Market Perform rating, notably without providing a price target. This neutral stance from analysts may have contributed to investor caution, especially given the stock's meteoric rise of approximately 200% in just one month. The lack of a specific price target could be interpreted as hesitancy among analysts to justify the current valuation levels.

Adding to investor concerns are reports highlighting CoreWeave's significant debt burden and customer concentration risk. The company reportedly has $8.6 billion in debt on its balance sheet, taken on to fund rapid expansion of its data centers. Additionally, it was noted that 62% of last year's revenue came from a single customer, Microsoft, although the company claims no single customer now represents more than 50% of its backlog.

While CoreWeave has shown impressive growth, with Q1 2025 revenue surging 420% to $981.6 million, the company remains unprofitable on a GAAP basis. In Q1, it reported a net loss of $314.6 million, largely due to high interest expenses and costs associated with its recent IPO. These factors may be causing some investors to reassess the stock's valuation and growth prospects, leading to today's selloff.