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Importance of IPO and market position
From a broader perspective, it can be said that CoreWeave's IPO represents a kind of test of investor confidence in startups, as the IPO market has been in a downturn since 2022 until now. Although the valuation of CoreWeave shares fell to $40 from an expected $47 to $55*, the firm managed to sell 37.5 million shares, raising $1.5 billion. It thus took over the lead from Reddit and Freshworks, which were considered the most significant IPOs in the last 3 years. For comparison, in 2023, Reddit raised $750 million, while the more successful Freshoworks raised up to $1 billion in 2021.
Source: Tradingview
Although the IPO of this technology player is important in terms of size and importance, in recent weeks, the start-up medical startup Hinge Healt, the online loan provider Klarna or even StubHub, which specializes in ticket sales, have also joined the capital market. This is an additional factor, confirming that making shares available to the public is again a desirable way to raise capital.
A promising business model?
CoreWeav's primary focus is to provide the processing power of graphics units from the market leader, Nvidia. First of all, these are all the necessary processes associated with artificial intelligence, which is a very promising focus in the context of current technological trends.
Are you asking about their clients?
CoreWeav's business has grown impulsively, and currently their services are provided to the biggest tech giants on the scene such as Microsoft, Meta, IBM and Cohere. However, the company is not idle and continues to expand its customer portfolio. Recently, the company announced a five-year contract with OpenAI worth a total of up to $11.9 billion. However, the story with OpenAI does not end here, and the giant has also agreed to buy CoreWeav shares for $350 million, which is a clear signal of confidence.
Financial results and challenges
From a financial point of view, which is an integral part of analyzing the company, the company reported sales of almost $2 billion for 2024. However, this number is more significant compared to the previous year, as it represents a remarkable 700% growth. At the same time, it is important to note that at the end of the reporting period, it reported a net loss of USD 863 million, which points to the capital intensity of its business. With proper use of the funds raised from the IPO, there is, however, a high potential for a turn to profitability.
Conclusion
The relevance of CoreWeav's IPO is unquestionable. The company is a promising player in the technology sector with strong partnerships and exceptionally fast revenue growth. For investors looking to diversify in a firm that trades below their potential future price due to the fundamental strength and valuation of the competition, CoreWeave represents a very attractive and promising investment opportunity.
* Historical figures are not a guarantee of future returns.
Warning! This marketing material is not and should not be construed as investment advice. Data relating to the past are not a guarantee of future returns. Investing in foreign currency can affect returns due to fluctuations. All securities trades can lead to both profits and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which is subject to change. These statements do not guarantee future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s., regulated by the National Bank of Slovakia.
Sources:
https://www.cnbc.com/2025/03/27/coreweave-prices-ipo-at-40-a-share-below-expected-range.html
https://www.cnbc.com/2025/03/03/ai-cloud-provider-coreweave-files-for-ipo.html
