CoreWeave's stock price closed at a record high of $150.48 on Tuesday, rising over 25%, with the company's stock increasing 248% since its IPO. Since the strong Earnings Reports released on May 15, the company has become one of the top two stocks by trading volume on the trading platform Public.com, with retail investors betting four times more on its Call Options compared to its Put Options.
From an unremarkable IPO to a Market Cap tripling, $CoreWeave (CRWV.US)$ the stock price soared.
Tuesday, $NVIDIA (NVDA.US)$ Supported cloud service provider CoreWeave's stock price reached a historic high of $150.48, rising over 25%, and the company's stock has skyrocketed 248% since its IPO.
AI computing power business is expanding wildly, with capital expenditure expected to surge.
CoreWeave's core business is based on $NVIDIA (NVDA.US)$ chip processing of artificial intelligence workloads, with its data centers designed from the ground up, optimized specifically for AI computing. The latest leasing agreement with Applied Digital further solidifies its layout of 33 AI data centers in the United States and Europe.
As NVIDIA's strategic partner, CoreWeave not only benefits from its technical support but also attracts Microsoft, its largest client, along with a five-year, $11.9 billion long-term partnership with OpenAI.
In 2025, the company expects capital expenditure to soar by 53% to $21.5 billion, showcasing its ambition for AI infrastructure expansion.
Retail investors are celebrating, while Wall Street remains indifferent.
In just two months, CoreWeave's Market Cap soared from 23 billion dollars at IPO to an astounding 72 billion dollars, with the offering price rising from 40 dollars to the current 150.48 dollars.
Especially since the strong Earnings Reports were released on May 15, the company has become one of the top two traded Stocks on the trading platform Public.com, with retail investors betting four times more on its Call Options than on Put Options.
However, this retail-driven frenzy has not won the praise of Wall Street.
CoreWeave was not Bullish at the beginning of its IPO, with Wall Street full of doubts about its high debt, customer concentration, and the management's cash-out behavior.
This led investment banks to narrow the offering scale before the IPO and primarily allocate shares to existing investors such as NVIDIA and Fidelity, creating a "moat" to prevent the stock price from collapsing.
Currently, according to financial data company S3 Partners, about 30% of the tradable shares have been shorted, indicating that institutional investors are generally bearish on its valuation.
S3 Partners' Matthew Unterman pointed out that due to the sustained high demand for shorting and the limited float, the borrowing cost for shares continues to rise, making shorting CoreWeave an expensive gamble.
Given the current stock price trend, shorting CoreWeave has proven to be a very poor decision.
The equity structure is unique, with significant potential for capital operation.
CoreWeave's main shareholders include Magnetar Capital, the largest supplier and customer NVIDIA, client OpenAI, and long-term investors like Fidelity.
These investors, along with the company's three co-founders, collectively hold over 60% of the outstanding shares, which may serve as an important support for stock price stability.
Analysts believe that the surge in stock price provides CoreWeave with more room for capital operations.
Additionally, the company's co-founders have already cashed out $0.5 billion during the IPO, and the selling pressure may ease in the short term. Analysts at MoffettNathanson wrote in a report to clients last week:
"The high stock price gives CoreWeave the opportunity to create value through equity financing or acquisitions, which seems to be a clear possibility."
As the regular stock sale restrictions post-IPO will end this summer, executives, employees, and existing investors will be able to sell more shares at that time. However, given the company's strong financial performance and market demand, many analysts remain cautiously optimistic about its prospects.
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