CoreWeave staged a comeback on Tuesday, sending its stock soaring 42% to $52.57. The AI infrastructure company's performance marks a sharp reversal from Monday's slump, when shares dipped below their $40 IPO price.
The company's path to going public wasn't smooth. CoreWeave trimmed both its share price and offering size last week, settling for $40 per share instead of the planned $47-$55 range. They also cut the number of shares from 49 million to 37.5 million.
CEO Mike Intrator faces stiff competition from tech giants. Microsoft, the company's biggest customer, also ranks among its main rivals alongside Amazon, Google, and Oracle. CoreWeave rents out Nvidia's coveted AI chips to tech companies hungry for computing power.
Despite posting a $863 million net loss, CoreWeave's revenue shot up 737% last year to $1.92 billion. Nvidia showed confidence by placing a $250-million order during the IPO, which raised $1.5 billion total.
The IPO market has been watching CoreWeave closely. As the biggest venture-backed tech IPO since 2021, its performance could signal whether other companies waiting in the wings – like StubHub, Klarna, and Hinge Health – should take the plunge.
Why this matters:
CoreWeave's wild stock swings reveal both the massive appetite for AI infrastructure and investors' jitters about tech valuations
The IPO's reception could determine whether 2024 finally breaks the three-year drought in tech public offerings
