CoreWeave’s shares surged nearly 42% on Tuesday, recovering above their initial public offering (IPO) price after a subdued second day of trading. The stock closed at $52.57, resulting in a market capitalisation of nearly $25bn, reported CNBC. The Nvidia-supported cloud computing firm had seen its shares decline by over 10% on Monday, dipping below the IPO price of $40. The stock had opened at $39 on Friday, marking the largest venture-backed tech IPO for a US company since 2021, and closed flat at $40.
Last week, CoreWeave adjusted its offering price to $40, down from an initially anticipated range of $47 to $55, and reduced the offering size to 37.5 million shares from 49 million. As part of the IPO, Nvidia placed a $250m order, contributing to the $1.5bn raised, according to Reuters.
Headquartered in Livingston, New Jersey, CoreWeave offers access to data centres and Nvidia chips, which are in high demand for AI application development. In its IPO filing last month, CoreWeave reported a revenue increase of over 700% in 2024, reaching $1.92bn, despite a net loss of $863.4m.
The company supplies cloud-based Nvidia processors to major clients such as Meta and Microsoft, with Redmond accounting for 62% of its revenue last year. CoreWeave has secured contracts exceeding $15bn that are yet to be fulfilled.
In the fourth quarter of 2024, CoreWeave reported $747.4m in revenue, maintaining a gross margin of about 76%. Despite recording an operating income of $112.7m, interest expenses resulted in a net loss of $51.4m. By year-end, the company’s debt approached $8bn.
Furthermore, CoreWeave refuted claims of contract withdrawals following a Financial Times report in March suggesting that Microsoft, the company’s largest client, had retracted from certain agreements. “We pride ourselves in our client partnerships and there have been no contract cancellations or walking away from commitments. Any claim to the contrary is false and misleading,” a CoreWeave representative stated via email to Reuters.
CoreWeave secures $11.9bn OpenAI contract
Last month, CoreWeave secured an $11.9bn contract from OpenAI to provide essential AI infrastructure, significantly enhancing the computing capabilities of the ChatGPT developer. This five-year partnership aims to support the global distribution of OpenAI’s models to millions of users. In addition to this agreement, OpenAI will invest $350m in CoreWeave stock, a transaction separate from the company’s IPO.
CoreWeave operates a cloud service network centred on AI, consisting of 32 data centres. By the close of 2024, these sites contained more than 250,000 Nvidia GPUs, including the latest Blackwell GPUs tailored for AI reasoning tasks.
Read more: CoreWeave and OpenAI sign $11.9bn AI infrastructure deal
