Coreweave scored the Nasdaq on Friday in the middle of a changing story and very anticipation. The company estimated its IPO at $ 40 per share. The stock collapsed, opening at $ 39 per share, then lowering up to 6% and ending the day at $ 41.59.
The Cloud company, founded in 2017, is the first public offer AI Pure-Play in the United States. Coreweave buys NVIDIA graphic processing units, then combines them with software to give companies an easy way to access GPUs and obtain the highest performance of their AI products and services.
The financial future of the company depends on two unknowns – that the use and usefulness of AI develop considerably and that these workloads will continue to operate on NVIDIA GPUs.
It is not surprising that the list has often been described as a bell tower for the entire AI industry.
But the specific activities of Corewave have contours that could be responsible for the ambivalent beginnings on Friday without passing judgment on the AI as a whole.
Coreweave customers are very concentrated and its suppliers have it even more. The company is highly exploited, with billions of debts, guaranteed by GPUs. The future obsolescence of these GPUs is looming.
Umesh Padval, Director General of Thomvest, plans that the Coreweave GPU IT price proposes to drop over the next 12 to 18 months while the GPU offer continues to improve, which could question the future profitability of the company.
“In general, this is not a bell tower in my opinion,” Padval told Business Insider.
Beyond the opening day
So, what does this mean that the beginnings of Coreweave have not raised hopes and expectations?
Karl Mozurkewich, the main architect of Cloud Valdi, told Bi that Friday’s IPO is more a test for the Neocloud concept than for AI. Neoclouds are a term used to describe young public cloud suppliers who focus only on accelerated IT. They often use Nvidia’s favorite reference architecture and, in theory, demonstrate the best possible performance for Nvidia equipment.
Nvidia CEO Jensen Huang gave the Buch a cry at the company Tentpole GTC conference last week.
“What they are doing is only one thing. They host GPUs,” Huang told an audience of almost 18,000. “They are called the GPU clouds, and one of our big partners, Coreweave, is becoming public and we are super proud of them.”
According to Mozurkewich, Corewave public market performance reports the form of the future for these companies. Will more companies try to reproduce the GPU-Cloud model? Will Nvidia sow more similar companies? Will he continue to give the neoclouds early access to the new equipment?
“I think the industry is very interested in seeing if the form of Coreweave is successful in the long term,” said Mozurkewich.
Daniel Newman, CEO of the Futurum group, told Bi that Coreweave is “a point of measure of the trade of AI; it is not entirely indicative of the global IA market or the request for AI”. He added that the company had the possibility of improving its fate as AI scales and that customers are developing and diversifying.
Lucas Keh, analyst of semiconductors at Third Bridge accepted.
“Currently, more than 70% of Coreweave’s revenues come from hyperscalers, but our experts expect this concentration to decrease 1 to 2 years after an IPO when the company diversifies its customers beyond public cloud customers,” said Keh by e-mail.
Having a handful of large dominant business customers is not uncommon for a young supplier like Coreweave, said Mozurkewich. But it is not surprising that it may concern investors.
“This is where Coreweave has a chance to shine as AA and the request for AI extends beyond the big names.
Other problems, such as obsolescence, the necessary damping and the leverage will be more difficult to shake.
Do you have a tip or an overview to share? Contact Emma at ecosgro@businessinsider.com or use the secure messaging application signal: 443-333-9088
businessinsider
