A significant rise was observed in the shares of AI cloud firm CoreWeave (CRWV) on May 16, following the disclosure by chipmaker Nvidia of its substantial ownership stake—an indication of increasing interest from corporate entities and institutional investors in the recently listed company.
It was revealed through regulatory filings that Nvidia’s holdings in CRWV were raised to 24.2 million shares by the close of the first quarter, up from 17.9 million shares.
An increase of up to 26.3% was recorded in CRWV stock during New York trading, elevating its market capitalization beyond $38 billion. According to data from Yahoo Finance, trading volume was reported at more than twice the typical daily average.
The stock was most recently observed trading near $81, reflecting a 23% gain for the day.
A surge in CoreWeave’s stock was triggered by regulatory disclosures indicating that Nvidia held $900 million worth of CRWV shares at the conclusion of the first quarter. Since March 31, the value of these holdings has more than doubled, provided that no shares have been sold by Nvidia during this period.
It was reported by CNBC that Nvidia’s stake at the time of CoreWeave’s initial public offering (IPO) consisted of 17.9 million shares.
More than a 100% increase has been recorded in CoreWeave’s stock since its IPO price of $40 in late March. During that time frame, it has been significantly outperformed by both the Nasdaq Composite Index and the wider US equity market.
CoreWeave’s financial results for the fiscal first quarter were eclipsed by Nvidia’s disclosures, despite revealing a 420% rise in revenue alongside a 487% increase in operating costs. A 143% expansion in net loss was reported compared to the same period last year.
CoreWeave’s Entangled Past in Cryptocurrency
CoreWeave’s beginnings were established in 2017 as an Ethereum mining venture under the name Atlantic Crypto. A shift away from digital assets was initiated by the company in the following year, prompted by the emergence of a bear market.
By 2019, a rebranding to CoreWeave had been completed, and its GPU infrastructure was utilized to deliver cloud computing solutions. The AI boom was capitalized on by the company, along with its distinctive partnership with Nvidia, to achieve a highly successful IPO debut.
Additional major investors have been secured by CoreWeave, with a March report from stating that a deal worth $11.9 billion was finalized by OpenAI to obtain AI infrastructure from the company to support the extensive data requirements of the ChatGPT developer.
CoreWeave is being positioned within the expansive cloud computing sector, which, according to Goldman Sachs, is projected to grow into a $2 trillion giant by 2030 as AI technologies are increasingly embraced across mainstream markets.
An estimate provided by Fortune Business Insights indicated that the global cloud AI market could near $600 billion by 2032, with a compound annual growth rate of 28.5% projected over the period.
