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Companies opting for initial public offerings (IPO) amid one of the most tumultuous periods in recent economic history may either be audacious, foolish, or a bit of both. Yet, after years of sluggish activity, Ernst & Young believes that the IPO market is set to rebound this year. Though investor sentiments remain muted due to tariff uncertainties and recession fears, a cloud computing company backed by AI darling Nvidia (NVDA) is set to debut on the markets later this week.
About CoreWeave Stock
Founded in 2017 as Atlantic Crypto, a cryptocurrency mining venture, CoreWeave is a specialized cloud provider focusing on GPU-accelerated workloads for applications such as AI and machine learning. The company, which transitioned in 2019 to cloud computing services, now provides cloud infrastructure optimized for GPU-intensive tasks, catering to industries requiring substantial computational power.
According to this recent filing, the company aims to raise $2.7 billion with an expected pricing range of $47 to $55 per share as it plans to sell roughly 49 million shares in the offering. CoreWeave intends to use the proceeds from the IPO for working capital and other general corporate purposes.
So, is CoreWeave, which is set to trade under the ticker CRWV, a worthy buy once it starts trading on Friday, March 28? Let’s take a closer look!
The Market Opportunity
The AI cloud infrastructure market is booming due to significant growth fueled by rising demand for AI capabilities and the scalability of cloud platforms. The company's filing states:
“According to Bloomberg Intelligence, the market for AI inference/fine-tuning, AI workload monitoring, and training infrastructure, including AI servers, AI storage, training compute, cloud workloads, and networking, will increase by over $300 billion from 2023 to 2028, growing at a CAGR of 38% from approximately $79 billion in 2023 to approximately $399 billion by 2028. This market opportunity is expected to include $330 billion related to training infrastructure, which includes AI servers, AI storage, training compute, LLM licensing revenue, cloud workloads, and networking; $49 billion related to inference infrastructure; and $20 billion related to workload monitoring, all of which are supportable by CoreWeave.”
Moreover, experts report that the global cloud AI market will grow from $80.3 billion in 2024 to $327.5 billion by 2029, while others report market could be worth about $400 billion by 2030.
As AI spending increases, the addressable market for CoreWeave is sizeable.
Financials
Over the last three years, CoreWeave’s revenues have multiplied from $15.8 million in 2022 to $1.9 billion in 2024. Although the net loss widened in the same period to $863.4 million from $31.1 million, the company became operationally profitable. While in 2022, operating losses were at $22.9 million, operating profits were at $324.3 million with margins at 16%.
Notably, as of Dec. 31, 2024, CRWV had $15.1 billion in remaining performance obligations (RPO), an increase of 53% from the previous year-end figure.
Net cash from operating activities also witnessed a substantial rise from $910 million for 2022 to $2.7 billion for 2024. In terms of overall liquidity, the company ended 2024 with a cash balance of $1.4 billion compared to a mere $217.1 million at the end of 2023.
Material Drivers for CRWV After the CoreWeave IPO
CoreWeave is experiencing rapid growth, propelled by surging demand for AI infrastructure and its close ties with key industry players. However, the company faces significant customer concentration risks, with Microsoft (MSFT) contributing 35% of its revenue in 2023 and escalating to 62% in 2024. Despite this reliance, its client portfolio includes other notable names such as Meta Platforms (META), International Business Machines (IBM), and Mistral AI, offering a degree of diversification.
A recent highlight for CoreWeave is its $12 billion agreement with OpenAI, the creator of ChatGPT, ensuring consistent revenue visibility over the coming years. CEO Michael Intrator emphasized that this partnership reflects the company’s capacity to provide reliable and high-performance infrastructure for leading AI innovators. He noted that CoreWeave remains a preferred partner for organizations seeking to push the frontiers of artificial intelligence.
To further enhance its service offerings, CoreWeave recently announced the acquisition of Weights & Biases, a platform designed to support AI developers by optimizing application development workflows. This move aligns with the company’s broader strategy to improve client experiences and deepen its technological edge.
As part of its long-term growth plan, CoreWeave continues to focus on expanding across various industry verticals, increasing its vertical integration, and scaling its presence internationally. While competition remains intense, the company stands to benefit from robust industry growth dynamics and its strategic partnership with Nvidia, positioning it well in the evolving AI infrastructure landscape.
