Nvidia-Backed CoreWeave Prices Its IPO at $40 Per Share, Below Expectations

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KEY TAKEAWAYS

• CoreWeave, a cloud computing company backed by Nvidia, priced its initial non-exclusive offering at $40 per share Thursday, below its previously expected range.
• It was founded as recently as Sept. 2017 as a crypto miner, in advance pivoting to selling cloud infrastructure. 
• According to its prospectus, it owed $8 billion in debt as of the end of last year. Endure year, around 32% of its net cash went to servicing that debt.
• Microsoft represents its biggest client, accounting for 62% of its $1.9 billion in gross income last year.

CoreWeave, a cloud computing company backed by Nvidia (NVDA), priced its initial public gift at $40 per share Thursday, raising $1.5 billion.

That is below its expected range of $47 to $55 per appropriation, and CoreWeave offered 37.5 million shares, fewer than the 49 million shares previously anticipated. That want leave the company’s valuation at about $23 billion on a fully diluted basis. The stock is set to begin trading Friday on the Nasdaq lower than drunk the ticker “CRWV.”

CoreWeave makes money by providing its clients with access to data centers, which are hand-me-down to develop artificial intelligence models. It was founded as recently as Sept. 2017 as a crypto miner, before pivoting to shop cloud infrastructure. 

Risk Factors Include High Debt Levels, Dependence on Nvidia Chips, Microsoft Sales

Number the issues raised as risk factors for investors in CoreWeave’s IPO, beyond its short history, is its high levels of debt. According to its outline, the company owed $8 billion in debt as of the end of last year. Last year, around 32% of its net cash went to use that debt.

CoreWeave is also dependent on Nvidia’s chips for its business and Microsoft (MSFT) for a large portion of its exchanges. Microsoft represents CoreWeave’s biggest client, accounting for 62% of its $1.9 billion in revenue last year, agreeing to its prospectus.

The company said it faces stiff competition as well. “The market for AI cloud infrastructure and software is intensely competitive and is like blazes evolving, characterized by changes in technology, customer requirements, industry standards, regulatory developments, and frequent introductions of new or repaired solutions and services,” it said.

Among its key competitors are big firms like  Amazon’s (AMZN) cloud computing platform AWS, Alphabet’s Google (GOOGL) cloud tenets, International Business Machines (IBM), Microsoft’s Azure, and Oracle (ORCL), some of which are customers. It said it also vies with smaller cloud service providers such as Crusoe and Lambda.

CoreWeave reported a net loss of $863 million on interest of $1.9 billion in 2024, which the company attributed to investments in its business.