The market for initial public offerings (IPOs) hasn't heated up as fast as many expected this year. Still, things look to be improving compared to 2024, with 69 IPOs filed through March 28 – up 30% year over year – according to Renaissance Capital.
And one of the most-anticipated upcoming IPOs of the year just dropped. Earlier this month, CoreWeave filed paperwork to go publi. And on March 28, shares of the tech stock began trading on the Nasdaq under the ticker symbol "CRWV."
Ahead of its market debut, CoreWeave priced its IPO at $40 per share, below the previous range of $47 to $55 per share. This raised $1.5 billion for the company, based on the 37.5 million CRWV shares that were made available. This makes it one of the biggest IPOs in recent memory.
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Shares opened on March 28 trading at $39 and bounced between $37.50 and $41.89 before ending the day squarely at $40.00.
"This was the first major IPO to test the market since the recent sell-off, and it didn’t deliver," says Bill Smith, CEO and founder of Renaissance Capital. "A mountain of debt, an unclear moat, and a raft of related-party transactions weighed heavily on the deal."
Smith adds that "rumors of canceled service agreements and technical loan defaults added more 'hair' to an already hairy deal."
CoreWeave originated as a crypto mining firm before shifting to a cloud-computing company whose main business now involves renting artificial intelligence (AI) infrastructure to AI developers. The company has 32 data centers across the U.S. and Europe that are equipped with Nvidia (NVDA) chips.
Nvidia is among CoreWeave's high-profile investors, with a reported 6% stake in the firm – and it counts itself as one of the company's noteworthy customers. Meta Platforms (META), OpenAI and IBM (IBM) are also included among its clientele, while Microsoft (MSFT) has committed to spending $10 billion at CoreWeave through 2030.
How much is CoreWeave worth?
According to its S-1 filing with the Securities and Exchange Commission (SEC), CoreWeave had $1.9 billion in revenue in 2024 vs $229 million in 2023. The bulk of its revenue last year came from Microsoft.
Its net loss widened to $863 million in 2024 from $594 million in 2023.
CoreWeave's adjusted operating income margin, or the difference between the adjusted operating margin and net sales, was a respectable 19% at the end of 2024. It also had $15.1 billion of remaining performance obligations as of December 31, up 53% over the year prior.
Should you buy CoreWeave stock?
"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," writes Kiplinger contributor Tom Taulli in his feature "What Is an Initial Public Offering (IPO)?".
But IPOs can be volatile – especially for retail investors. While IPO stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.
As for retail investors, whether or not you buy the CoreWeave IPO boils down to your own personal investing goals and risk tolerance. If you do decide to buy CRWV stock when it first begins trading, do so in a small amount that you can afford to lose.
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