Market Analysis

Nvidia-Supported CoreWeave's Revenue Soars Ahead of US IPO

Amos Simanungkalit · 04 Mar22.5K Views

Image Credit: Reuters

Nvidia-backed CoreWeave has reported an eight-fold revenue increase in 2024, as outlined in its U.S. initial public offering (IPO) filing on Monday. The cloud provider is aiming to lead the first major AI-related IPO in New York this year.

The IPO filing signals a potential major stock market debut, as the IPO market heats up following February's seasonal slowdown. CoreWeave, based in Roseland, New Jersey, along with some current shareholders, plans to sell shares in the upcoming offering. The company is reportedly targeting over $3 billion in proceeds from the sale.

Founded in 2017, CoreWeave provides access to data centers and high-performance chips for AI tasks, largely supplied by Nvidia. It competes with major cloud providers like Microsoft’s Azure and Amazon’s AWS. CoreWeave's clientele includes companies such as Meta, IBM, Microsoft, and hedge fund Jane Street. The company is expected to seek a valuation exceeding $35 billion during its New York listing.

In November, CoreWeave was valued at $23 billion after a $650 million secondary share sale. For 2024, the company reported a revenue surge to $1.92 billion, up from $228.9 million the previous year. However, its net loss expanded to $863.4 million from $593.7 million in 2023.

“CoreWeave could be one of the headline IPOs of 2025, and we’ve been waiting for a tech company like this to break the ice,” said Matt Kennedy, senior strategist at Renaissance Capital, which specializes in IPO research and ETFs.

CoreWeave has raised more than $14.5 billion through 12 financing rounds. Notably, in May, the company secured over $7 billion in one of the largest private debt rounds ever, led by Blackstone and Magnetar.

The demand for data centers has surged with the increasing use of AI across various industries. Despite concerns sparked by China's low-cost AI models and fears of an AI spending slowdown, Nvidia’s recent earnings report reassured investors about the continued growth in AI.

A successful IPO from CoreWeave could open the door for other AI companies to follow suit. “A successful listing could help reignite the IPO market for tech companies,” Kennedy said.

CoreWeave's data center network grew to 32 in 2024, up from 10 in 2023, and the company now operates more than 250,000 graphics processing units. Major investors include Magnetar, Fidelity, and Nvidia, which holds a 6% stake in the company.

CoreWeave has selected 14 banks to assist with the IPO, which will trade on the Nasdaq under the symbol "CRWV." Morgan Stanley, J.P. Morgan, and Goldman Sachs are leading the offering. The funds raised will be used for working capital and debt repayment.