March 28 (Reuters) - Concerns sparked by CoreWeave's

debt pile and other financial challenges may weigh on

retail investor enthusiasm as it prepares to go public after

what analysts said was a poorly timed IPO.

The Nvidia-backed AI infrastructure company, which focuses

on data centers and cloud services, is listing at a time when

the equity markets are under pressure from tariff uncertainty

and on rising concerns over the competition posed by China's

artificial intelligence startup DeepSeek.

Frustration is also mounting over when Big Tech's massive

investments in AI will yield returns, leading to concerns

CoreWeave may have missed the ideal window to list its shares.

"It feels like the IPO was poorly timed. Had it floated a

year ago, demand might have been much stronger than now as AI

interest has started to wane," Dan Coatsworth, investment

analyst at AJ Bell, said.

The listing comes at a time when IPO-bound companies, even

in the most high-profile sectors, have been under intense

scrutiny. Despite a recovery, the IPO market is nowhere near the

pandemic years when listings had soared.

CoreWeave already suffered a setback on Thursday when it

downsized its IPO. Under the new terms, it fetched a fully

diluted valuation of around $23 billion compared with the $32

billion it was targeting earlier.

"It's got a lot of risks. I don't know what is the long-term

sustainability of the business," said Kamran Ansari, managing

partner at Kapital Ventures.

CoreWeave's revenue jumped more than eight-fold last year,

but sustaining that growth will be critical.

"There will be risks over the longer term around the company

maintaining its impressive growth and not missing earnings

estimates," said Samuel Kerr, head of equity capital markets at

Mergermarket.

CoreWeave had about $8 billion in debt as of last year. The

company said earlier this month that it plans to use about $1

billion of the IPO proceeds to reduce debt.

Some investors have also flagged concerns about the

company's heavy reliance on Microsoft ( MSFT ), whose shifting

AI data center strategy could impact long-term demand for chips

known as graphics processing units, or GPUs.

AI HYPE

Top AI players have sparked massive interest from retail

investors in recent years. Nvidia, Microsoft ( MSFT ), Amazon ( AMZN ),

Apple ( AAPL ) and Alphabet were among the top 20

stocks drawing retail investor inflows in 2024, according to

Vanda Research.

Some experts have also brushed aside concerns stemming from

DeepSeek, noting that heightened competition will drive more

investment rather than leading to cutbacks.

"AI remains a very hot investment theme despite doubts

earlier this year following the emergence of DeepSeek,"

Mergermarket's Kerr said.

Those seeking opportunities beyond the top tech names may

back CoreWeave.

Net inflows from retail investors into U.S. equities and

exchange-traded funds totaled $69.8 billion as of March 25 this

year, only slightly below the $71.7 billion invested in the

final quarter of 2024, according to Vanda Research.

"Retail investors will be drawn to (CoreWeave) as they

continue to look for other avenues of returns away from the

potentially lackluster performance of the MAG7 (Magnificent

Seven) stocks," Josef Schuster, CEO of IPO research firm IPOX,

said.

The Magnificent Seven - a group of tech giants that have

driven much of the stock market's gains in recent years - have

been battered so far in 2025.

CoreWeave did not immediately respond to a request for

comment. It is set to debut later on Friday.