CoreWeave is targeting a valuation of up to $32 billion on a fully diluted basis in its U.S. initial public offering, seeking to capitalize on strong demand for generative artificial intelligence.
This listing is viewed as critical for reviving the sluggish U.S. IPO market and as a measure of investor appetite for new entrants in a sector that has driven stock markets to record gains over the past two years.
The cloud services provider and its investors plan to sell 49 million shares priced between $47 and $55 each, aiming to raise as much as $2.7 billion. Prior to the IPO, CoreWeave partnered with major AI players, including Sam Altman's OpenAI, and recently secured an $11.9 billion infrastructure contract with the ChatGPT developer.
CoreWeave, which provides access to data centers and high-powered chips for AI workloads primarily supplied by Nvidia, plans to issue $350 million worth of shares to OpenAI through a private placement in the IPO.
Nvidia currently holds 5.96% of CoreWeave's Class A shares, which is expected to decrease to 5.05% following the offering.
The company has approximately 583 million fully diluted shares outstanding. Based on the number of shares listed in the filing, its targeted valuation at the upper end of the range is $26 billion.
A successful debut for CoreWeave could restore confidence in IPOs and encourage more companies to go public. In contrast, a lackluster performance may deepen concerns about fragile investor appetite despite improving market conditions.
With a focus on AI demand, the IPO is anticipated to be a crucial test of whether specialized data centers can outperform traditional cloud giants.
Additionally, reports indicate that Nvidia's rival is preparing for a 2025 listing, while data center operator Switch is contemplating an IPO with a valuation of around $40 billion.
This offering follows a shift to low-cost models and a reduction in data center leases, which has tempered previously intense demand.
Concerns are growing that the surge in AI-related data center demand may not be as robust as anticipated, leading investors to either seek a bargain price for CoreWeave shares or hold off for now, according to Dan Coatsworth, an investment analyst at AJ Bell.
Founded in 2017 as a crypto miner, CoreWeave raised over $3 billion in its share sale at a valuation exceeding $35 billion. The company ceased its crypto mining operations after Ethereum's 2022 upgrade, "The Merge," which significantly reduced rewards for miners.
Morgan Stanley, J.P. Morgan, and Goldman Sachs are the lead underwriters for the IPO. CoreWeave plans to trade on the Nasdaq under the ticker symbol "CRWV."