Investing.com -- Shares of CoreWeave and Nebius fell in premarket trading Tuesday as South Korean AI infrastructure provider Elice’s disastrous market debut added to concerns that investors are becoming more selective about the companies supplying computing power for the artificial intelligence boom.

CoreWeave (NASDAQ: CRWV) dropped 4% and Nebius Group (NASDAQ: NBIS) fell 4.8%, while Nasdaq futures pointed to a 0.75% decline. The moves came after Elice sank 32% on its first day of trading in Seoul, despite overwhelming demand for its initial public offering.

Mizuho trading desk analyst Daniel O’Regan described the debut as another sign of deteriorating sentiment toward neocloud companies, which build or lease computing infrastructure and sell access to AI computing capacity.

Investors are increasingly questioning whether the returns from AI infrastructure spending will justify the capital required to build out data centers, particularly as borrowing costs rise and valuations come under scrutiny, O’Regan wrote.

Elice shares fell as much as 38% before closing at 61,500 won, well below their IPO price of 90,500 won. The company raised approximately 201 billion won ($151 million) in the offering, which was priced at the top of its marketed range. Institutional demand exceeded the available shares by 388.8 times, while retail subscriptions topped 400 times the allocation.

The sharp reversal from heavy subscription demand to a steep first-day loss highlights the challenge facing AI infrastructure companies as investor enthusiasm increasingly collides with concerns about valuations, financing costs and capital-intensive expansion plans.

The pressure extends beyond South Korea. CoreWeave shares have fallen sharply from their May peak, while the company’s bonds have come under pressure. Australia’s Firmus Grid scrapped a planned IPO, data-center operator AirTrunk delayed a proposed listing, and Britain’s Nscale has faced pushback over its targeted valuation, Bloomberg News has reported.

“Sentiment toward AI infrastructure has been highly volatile and often disconnected from underlying fundamentals,” Albert Yong, managing partner and chief investment officer at Petra Capital Management, said, according to Bloomberg.

Elice operates an AI cloud business that provides computing infrastructure, including servers, GPUs, networking equipment and liquid-cooling systems. AI cloud services accounted for 76% of its revenue in the first half of 2026, up from just 7% in 2023, according to Mizuho’s analysis.

The company entered the public market with strong growth figures. First-half revenue surged 200% to 34.4 billion won, while operating profit reached 10.3 billion won. Earnings before interest, taxes, depreciation and amortization climbed more than elevenfold to 23.2 billion won, according to its prospectus.

Analyst Douglas Kim wrote in a note on Smartkarma that Elice could deliver 83% sales growth in 2026, with an operating margin of approximately 33%.

However, the outlook for continued growth may not be enough to sustain investor confidence. Kim Dojoon, chief executive officer of Zian Investment Management, said Elice’s financial structure differs from CoreWeave’s and that investors need not view the South Korean company as particularly risky.

“It remains to be seen whether the company can maintain its current profitability,” Kim added.

Elice plans to use the IPO proceeds to expand its data-center operations in South Korea and overseas. Chief Executive Officer Jae Won Kim said the listing would provide the financial resources needed to compete globally in AI infrastructure.

“We’re going all-in on becoming a full-stack AI infrastructure leader globally,” Kim told Bloomberg. “This IPO is about giving ourselves the financial firepower to execute.”

For the broader AI trade, Elice’s debut adds to questions about whether surging demand for computing capacity will translate into attractive returns for infrastructure providers and their investors. Even with rapid revenue growth, companies in the sector face substantial capital requirements and growing scrutiny over the cost of financing their expansion.

Original Article