Two months into 2025, the outlook for financial markets is complicated, especially for tech companies.
Many industry-leading companies, including Tesla (TSLA) and Microsoft (MSFT,) have struggled lately amid mounting uncertainty. Despite a mostly strong Q4 earnings report, Nvidia (NVDA) has been highly volatile over the past week, even after CEO Jensen Huang predicted a strong year ahead.
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With most members of the Magnificent 7 group of leading tech stocks significantly underperforming, investors may be tempted to look for smaller cap opportunities. This may include zeroing in on a tech startup that is poised to go public in the near future.
Since the beginning of the year, the market hasn’t seen any exciting initial public offerings (IPOs). However, this company could change that, particularly as it has a strong relationship with Nvidia.
A tech company that experts have watching for some time is preparing to go public.
Photographer: Jeenah Moon/Bloomberg via Getty Images
The tech sector is about to have its first big IPO of 2025
For months, experts have speculated what the year’s biggest IPO will be. Since the market is currently in an IPO desert, a period in which no major companies have opted to go public, questions have risen about who can kickstart it.
Now, it seems that the answer may be CoreWeave, a company that bills itself as “The AI Hyperscaler.” Well known in the world of artificial intelligence (AI), the startup provides data-intensive AI workload infrastructure and offers a wide range of AI and data storage services.
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Founded in 2017, CoreWeave is closely linked to Nvidia. In 2023, it deployed the NVIDIA H200 Tensor Core graphics processing unit (GPU) before any other cloud computing company. Nvidia invested $100 million in the startup during the same year.
As investors have searched for the next Nvidia, the name CoreWeave has been continuously floated, as experts have speculated as to when it will go public. Now, the Financial Times reports that the company is preparing to file for an IPO by next week and is aiming to raise $4 billion, targeting a valuation of $35 billion.
Experts are excited about the prospect of a CoreWeave IPO and see it as a highly positive development for the tech market. Mark Klein, CEO of SuRo Capital SSS, spoke to TheStreet about his firm’s bullish take on the company.
Klein reflects on being initially impressed with CoreWeave’s “extraordinary” business model, stating, “The demand for compute and the supply of compute was the most disproportionate ratio of almost anything I’ve seen in the close to 40 years that I’ve been in the business.”
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He also highlights CoreWeave’s history with Nvidia as an important catalyst. They were always going to get a large allocation of the next-gen chip, as they did with the Blackwell shipment. You put that all together, you see where they were set up, and the contracts that they have had and continue to get that are long term contracts.”
The stage is set for the CoreWeave IPO, and the stakes are high
In December 2024, as speculation mounted for the CoreWeave IPO, Deutsche Bank analyst David Folkerts-Landau highlighted that it could be exactly what the lagging tech market needed to start rising again.
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“The (IPO) pipeline for U.S. share sales has largely dried up over the past two years, with technology deals few and far between,” he stated in a report, noting the strong potential that CoreWeave had to help change that.
Months later, even as the tech market continues to lag, Klein isn’t concerned about the looming CoreWeave IPO. On the contrary, he predicts that it will go well and inspire other tech companies to go public.
“I think that Coreweave having a successful offering, which we’re really confident that they will have, will certainly give bankers and other companies comfort that bringing really good companies priced appropriately to the public markets will be very well received,” he states.
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