CoreWeave (IPO): key AI infrastructure player goes public

CoreWeave is a GPU-based cloud computing provider that specializes in renting computing power for AI applications. Its IPO (March 28, 2024 on NASDAQ) is one of the largest technology primary issuances this year.

Explosive revenue growth and long-term contracts:

Year-over-year revenue growth of 747% to $1.9 billion

Contract awards valued at $15.1 billion (+54% year-over-year)

96% of revenue secured by long-term contracts (2-5 years) → high stability

CoreWeave is not only a fast-growing company, but has already signed giant contracts, ensuring stable cash flow even if the AI market slows down.

A key player in AI infrastructure

Major clients include Microsoft, Meta, IBM, Mistral AI, Nvidia and more recently OpenAI

$11.9 billion contract with OpenAI - the largest in the company's history

Strong relationship with Nvidia - the dominant supplier of GPUs for AI

While companies like OpenAI and Meta develop AI models, CoreWeave provides the computing capacity without which the AI industry could not function.

Massive AI market growth:

IDC estimates that AI will generate a $20 trillion economic impact by 2030

Spending on AI infrastructure could reach $399 billion by 2028 (Bloomberg Intelligence)

With the growing demand for AI, infrastructure investment is expected to grow rapidly, which plays into CoreWeave's hands.

Risks of investing in CoreWeave:

IPO hype and volatility - short-term overheating and price correction may occur after the first few days of trading.

Dependence on Nvidia GPUs - if Nvidia changes terms or starts to compete more, this could hurt CoreWeave.

AI market regulation - government intervention in the AI industry could affect CoreWeave's growth.

Competitive environment - Amazon AWS, Google Cloud and Microsoft Azure may strengthen their own AI infrastructure and reduce demand for CoreWeave's services.

Investment view: short-term vs. long-term potential:

Short-term (IPO speculation)

Historically, large IPOs have averaged a 29% return in the first week (Renaissance Capital).

If demand outstrips supply, the stock could appreciate quickly.

The IPO market is unpredictable - some tech stocks have risen rapidly after IPOs (Arm), while others have fallen (Klaviyo).

Long term (AI infrastructure as a megatrend):

Strong fundamentals, long-term contracts and strategic partnerships.

Increasing demand for AI computing power should help CoreWeave sustain growth.

It will depend on how the company maintains its lead and expands capacity.

CoreWeave is one of the key players in AI infrastructure, which gives it strong growth prospects. The IPO may offer a short-term speculative opportunity, but long-term success will depend on sustained growth, capacity expansion and competition.