Below target: Nvidia-backed CoreWeave goes public at $19B valuation
CoreWeave undercut Wall Street expectations by pricing its IPO at $40 a share April 19, raising $1.5 billion—the largest U.S. tech IPO since 2021. The cloud computing firm, which rents Nvidia GPUs for AI workloads, had initially aimed for $47 to $55 per share, a range that would’ve valued it at $26.5 billion. Instead, the $40 price tag drops its valuation to roughly $19 billion, though fully diluted equity pushes the market cap higher.
Nvidia, CoreWeave’s largest shareholder, will buy $250 million in shares at the $40 price, according to CNBC. The offering shrunk from 49 million to 37.5 million shares, Bloomberg reported. Trading begins Friday on Nasdaq under ticker CRWV.
The IPO arrives as tech startups and venture capital markets brace for a post-lull comeback. After a two-year drought in billion-dollar tech offerings, rivals like Hinge Health, Klarna, and StubHub have also filed to go public. The last $1 billion+ U.S. tech IPO was Freshworks in 2021; Reddit and Rubrik raised $750 million each last year.
Microsoft bails on $12B CoreWeave deal as OpenAI steps in
CoreWeave’s revenue skyrocketed 700% to nearly $2 billion in 2023, but net losses hit $863 million. Its capital-heavy model demands massive hardware and real estate investments. Microsoft is its top client, followed by Meta, IBM, and AI startup Cohere.
A week after filing, CoreWeave inked a $11.9 billion, five-year contract with OpenAI, which also agreed to purchase $350 million in CoreWeave stock. The deal aims to challenge Amazon, Microsoft, and Google in cloud infrastructure dominance.
President Trump’s recent tariffs on semiconductors and AI chips have added volatility to tech stocks, complicating Goldman Sachs’ earlier prediction of a post-election IPO boom. CoreWeave’s pricing reflects cautious investor sentiment in a still-treacherous market.