CoreWeave shares declined sharply even as major indexes advanced this week. The artificial intelligence infrastructure specialist saw its stock price drop 12.8 percent during the period. In contrast the S&P 500 index posted a gain of 3.4 percent.

The pullback followed new analyst commentary and reports that Nvidia is expanding its presence in cloud services. Investor concerns also grew around a potential large scale acquisition that could affect the company's valuation.

CoreWeave Reacts to Analyst View and Nvidia Expansion Plans

H.C. Wainwright issued its initial assessment of CoreWeave ahead of Wednesday's open. The firm assigned a neutral rating while highlighting valuation questions even as it recognized the company's demonstrated computing capabilities.

The Wall Street Journal reported that Nvidia intends to grow its cloud computing operations. Although Nvidia supplies critical GPUs that power AI data centers the company is developing its own AI as a service offering. As an investor in CoreWeave some market participants expressed concern that the larger firm could become a direct competitor.

Mixed Views Emerge on Potential Core Scientific Acquisition

Reports indicated CoreWeave is in talks to purchase Core Scientific with a transaction possibly completed within weeks at a notable premium. Trading patterns suggest investors hold divided opinions on the deal while analysts offered varying estimates on the purchase price.

Jefferies projected a range of 16 to 23 dollars per share. Cantor Fitzgerald suggested a figure above 30 dollars per share and Roth Capital estimated as much as 38 dollars per share in an all stock transaction. Given CoreWeave's earlier attempt to buy Core Scientific at 5.75 dollars per share some observers worry the company could overpay this time.

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Keith Noonan holds no positions in the securities discussed. The Motley Fool maintains a position in and recommends Nvidia. Additional disclosures are available through the firm's policy.

The perspectives expressed are those of the author and may not align with the views of Nasdaq Inc.