This Nvidia-Backed IPO Grew 737% Last Year and Is About to Go Public: What Investors Should Know About CoreWeave

Billy Duberstein, The Motley Fool

Sun, Mar 9, 2025, 9:00 AM 8 min read

There haven't been a ton of initial public offerings (IPOs) in recent years, let alone interesting, prominent companies with the potential to take on the top tech stocks in the market. However, one company right in the middle of the artificial intelligence (AI) revolution may be about to make its public debut. Not only is this stock growing at eye-popping levels, but it also counts Nvidia (NASDAQ: NVDA) as a big investor and Microsoft (NASDAQ: MSFT) as a huge customer.

Here's what you need to know about CoreWeave ahead of its IPO.

CoreWeave, which plans to list on the Nasdaq under the symbol CRWV, finds itself at the center of the AI revolution. However, the company didn't actually start out that way. In 2017, CoreWeave was founded by three executives at Hudson Ridge Asset Management, a natural-gas-focused hedge fund, with the original mission of mining cryptocurrencies.

The experience with cryptocurrencies honed CoreWeave's skills in deploying Nvidia graphics processing units (GPUs) -- which were used to mine crypto -- and managing energy-intensive computing clusters. Those skill sets also turned out to be incredibly important in AI computing.

In 2020, the company pivoted to build the CoreWeave Cloud Platform, and in April 2023, Nvidia invested in the company. Today, the AI chip giant owns just over 5% of the stock. In addition, Nvidia is a customer and likely uses CoreWeave to run its software offerings and perhaps test AI applications.

The Nvidia investment came at a very interesting time. As one may recall, May 2023 was the first blowout Nvidia earnings report, ushering in the hypergrowth stage of the AI buildout.

Some may wonder what exactly CoreWeave delivers that sets it apart from other major cloud infrastructure platforms. Reading through the Form S-1, it appears the company does a few things very well.

One key point CoreWeave emphasizes is that its clusters are built from the ground up as AI-optimized GPU clusters. This is in contrast to generalized cloud platforms that have to build both AI and traditional cloud infrastructures across their footprints.

CoreWeave believes it has a key advantage running these clusters through its proprietary orchestration and observability software, which enable more efficient utilization of its GPUs. Since AI GPU workloads are massive, complex, and computationally intense, it is difficult to orchestrate an entire data center for multiple clients efficiently.

To put some numbers to it, CoreWeave describes a metric called the model FLOPS (MFLOPS) utilization rate, which basically measures the utilization rate of an AI cluster relative to its total theoretical compute capacity. The industry average may surprise you. Due to the complexities of AI, CoreWeave says a typical MFLOPS rate is just 35% to 45% industrywide. That gap between actual and theoretical performance is the opportunity CoreWeave believes it can narrow, largely through some novel software innovations.