CoreWeave, an AI cloud computing provider backed by Nvidia, made its debut on the Nasdaq under the ticker CRWV. The company’s stock opened at $40 per share and fluctuated throughout the day before ending flat. CoreWeave raised $1.5 billion in its IPO, which is significantly lower than its initial goal of $4 billion.
The company’s success relies heavily on the adoption and commercialization of generative artificial intelligence, an area that is still largely unknown. Despite this uncertainty, CoreWeave’s revenue surged to $1.9 billion in 2024, with 77% coming from just two customers – Microsoft and a second unnamed hyperscaler.
Microsoft saw its stock drop by over 3% after CoreWeave shares began trading, while Nvidia fell by 1.7%. However, CoreWeave remains optimistic about its prospects. Co-founder Brannin McBee stated that clients are in high demand for the company’s infrastructure services and that growth is accelerating.
Despite this, CoreWeave faces significant debt repayments of $7.5 billion by the end of next year. Some critics, including Big Tech expert Ed Zitron, have questioned the company’s demand and revenue. Nevertheless, McBee attributes the demand to the critical role CoreWeave plays in connecting AI products to consumers.
CoreWeave’s debut is a significant test of the AI trade, with its fate tied closely to the success of this emerging field.
Source: https://finance.yahoo.com/news/coreweave-stock-seesaws-ends-flat-after-ipo-in-ai-trade-test-173445213.html