Key takeout
CoreWeave, a Nvidia (NVDA)-backed cloud computing company, priced a public offering of $40 per share on Thursday, raising $1.5 billion.
This was below the expected range of $47 to $55 per share, with CoreWeave offering 37.5 million shares less than previously expected 49 million shares. This will result in the company’s valuation to approximately $23 billion on a fully diluted basis. The shares are scheduled to open Friday trading on Nasdaq under the ticker “CRWV.”
CoreWeave makes money by providing clients with access to the data centers used to develop artificial intelligence models. It was founded in September 2017 as Crypto Miner before pivoting to sell cloud infrastructure.
Risk factors include high debt levels, reliance on NVIDIA chips, and Microsoft sales
Among the issues raised as a risk factor for investors in CoreWeave’s IPOs is its high level of debt, beyond its short history. The company owed $8 billion in debt as of late last year, according to the prospectus. Last year, about 32% of that net cash served its liabilities.
CoreWeave also relies on the majority of Nvidia’s business and Microsoft’s (MSFT) sales. According to the prospectus, Microsoft represents CoreWeave’s biggest client, accounting for 62% of its $1.9 billion revenue last year.
The company said it also faces tough competition. “The AI cloud infrastructure and software market is highly competitive and is evolving rapidly, featuring technology, customer requirements, industry standards, regulatory development, and frequent adoption of new or improved solutions and services,” he said.
Major competitors include Amazon (AMZN) cloud computing platform AWS, Alphabet’s Google (Googl) cloud platform, International Business Machines (IBM), Microsoft’s Azure, and Oracle (ORCL). He also said it would compete with smaller cloud service providers such as Crusoe and Lambda.
CoreWeave reported a net loss of $863 million in 2024 against $1.9 billion in revenue.
