CRWV: CoreWeave IPO to Start Trading at $40, Below Estimates. Should You Buy?

It’s a pure AI play — AI cloud company, formerly a crypto miner, is floating shares at a $23 billion valuation. Let’s talk about the risks and opportunities.

🛒 CoreWeave to Drop Shares

• CoreWeave stock CRWV is about to hit the trading venues around the globe when the US session kicks in with the opening bell in New York. It’s an AI cloud company that is listing shares through an initial public offering (IPO) at $40 a pop — well below the expected range of $47 to $55. Should you snap it up then?
• Not exactly, at least not for that reason alone. The lower-than-expected IPO price still values the company at a lofty $23 billion out of the gate. Also, CoreWeave sold 23% fewer shares than originally planned. The downsizing will see 37.5 million shares in flotation.

🤝 IPO Test + AI Test

• What’s special about it? All of CoreWeave’s sales are coming from cloud rentals of AI servers that use Nvidia chips. Moreover, CoreWeave has been a big customer for Nvidia, deploying more than 250,000 of the chip giant’s GPUs by the end of last year.
• In this light, the IPO will test investor enthusiasm for pure AI plays. But AI stocks haven’t performed too well recently with Nvidia undergoing a painful correction on looming tariff threats and China-related export restrictions. More broadly, the IPO will gauge appetite for newly listed public companies.

👀 Looking Under the Hood

• CoreWeave was founded in 2017 as a crypto miner but just one year later it bailed after a punishing crypto market downturn knocked off about 80% of Bitcoin’s price. What did it do instead? It started offering AI cloud services and positioned itself well for the launch of ChatGPT in 2022.
• In 2024, CoreWeave brought in revenue of $1.9 billion, a whopping 737% year-over-year increase. The company is also profitable on an operating basis with a 17% operating margin for 2024. And finally, Nvidia has invested in it and it’s also a supplier and customer.
• A key risk, however, is that only two companies are behind nearly 80% of its revenue — that same Nvidia NVDA and another tech titan, Microsoft MSFT. OpenAI, the maker of ChatGPT, also closed a deal with CoreWeave for “up to” $11.6 billion but the actual figure hasn’t been made public.