CoreWeave Shares Surge 15% on $14.2B Meta Deal
CoreWeave, a leading provider of cloud computing services for AI applications, has seen its shares surge by 15% as of 10:50 a.m. ET Tuesday. The company, which trades at about 13 times forward expected sales, has secured a significant deal with Meta Platforms worth $14.2 billion. This comes hot on the heels of a $6.5 billion expansion with OpenAI, pushing its market cap towards $70 billion despite not yet turning a profit and having a high debt-to-equity ratio.
CoreWeave specialises in building and operating data centers packed with Nvidia GPUs, leasing capacity to AI-focused companies. The recent deal with Meta Platforms, set to run through 2031 with an option to extend until 2032, will provide the social media giant with substantial iCloud computing power. This agreement follows Meta CEO Mark Zuckerberg's pledge to invest heavily in new data centers to fuel the company's AI ambitions.
CoreWeave's expansion is notable, given the lack of clarity about its client base. While it's part of the so-called 'Magnificent Seven' tech companies, specific clients using CoreWeave's infrastructure for AI applications remain unidentified in available search results.
With its latest deal, CoreWeave continues to solidify its position as a key player in the AI cloud computing landscape. Despite its high valuation, significant debt, and lack of profitability, investors appear bullish on the company's growth prospects, driving its share price higher.
