After three months of listing, the stock price rose nearly 3 times!

Source: Wall Street News

**From Obscure IPO to Tripled Market Cap: CoreWeave’s Soaring Stock Price**

On Tuesday, shares of Nvidia-backed cloud computing service provider CoreWeave closed at a record high of $150.48, surging over 25%. Since its IPO, the stock has skyrocketed by 248%.

**AI Computing Power Business Expands Rapidly, Capital Expenditure Set to Soar**

CoreWeave’s core business revolves around processing AI workloads using Nvidia chips, with data centers designed from the ground up specifically for AI optimization. Its latest leasing agreement with Applied Digital further strengthens its footprint across 33 AI data centers in the U.S. and Europe.

As a strategic partner of Nvidia, CoreWeave not only benefits from its technical support but has also attracted Microsoft as its largest customer and secured a five-year, $11.9 billion long-term deal with OpenAI.

In 2025, the company expects capital expenditure to surge by 53% to $21.5 billion, underscoring its ambitious expansion in AI infrastructure.

**Retail Investor Frenzy, Wall Street Skepticism**

In just two months, CoreWeave’s market cap has soared from $23 billion at IPO to an astonishing $72 billion, with its share price jumping from $40 to $150.48.

Since reporting strong earnings on May 15, the stock has become one of the top two most-traded equities on Public.com, with retail investors placing four times more bets on call options than puts.

However, this retail-driven frenzy has not won Wall Street’s applause.

Initially, CoreWeave’s IPO was met with skepticism due to concerns over its high debt, customer concentration, and insider selling. This forced investment banks to scale back the offering size and allocate shares primarily to existing investors like Nvidia and Fidelity, creating a "moat" to prevent a stock crash.

Currently, about 30% of tradable shares have been shorted, according to financial data firm S3 Partners, reflecting institutional investors’ bearish stance on its valuation.

Matthew Unterman of S3 Partners noted that due to high short demand and limited float, borrowing costs continue to rise, making shorting CoreWeave an expensive bet.

So far, shorting CoreWeave has proven to be a terrible decision given its relentless rally.

**Unique Shareholder Structure, Ample Room for Capital Moves**

CoreWeave’s major shareholders include Magnetar Capital, key supplier and customer Nvidia, client OpenAI, and long-term investors like Fidelity. Together with its three co-founders, they hold over 60% of outstanding shares—a concentrated ownership structure that may provide stability.

Analysts believe the soaring stock price gives CoreWeave more flexibility for capital maneuvers. Additionally, co-founders cashed out $500 million during the IPO, potentially reducing near-term selling pressure.

MoffettNathanson analysts wrote in a recent client note:

*"The elevated share price presents CoreWeave with opportunities to create value through equity financing or M&A, which seems a distinct possibility."*

As IPO lock-up restrictions expire later this summer, executives, employees, and early investors will gain the ability to sell more shares. Still, given the company’s strong financials and market demand, many analysts remain cautiously optimistic about its outlook.

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