Latest news with #KamranAnsari
Yahoo
28-03-2025
- Business
- Yahoo
Nvidia-backed CoreWeave's shares likely to open up to 25% above IPO price
(Reuters) - CoreWeave's shares were set to open up to 25% above their offer price in the company's debut on the Nasdaq on Friday. The Nvidia-backed AI infrastructure firm's stock was indicated to trade at $50, compared with the IPO price of $40. At the higher end, it could notch a valuation of around $29 billion on a fully diluted basis. The first major AI startup to list in recent years suffered a setback on Thursday when it downsized its initial public offering. A strong debut would be a welcome sign, offering hope to other IPO candidates that smooth listings are achievable with tempered valuations, but a lackluster performance may deepen skepticism at a time when equity markets are already grappling with tariff-related turmoil. "The U.S. IPO market is at an inflection point. This next batch of deals will determine whether the U.S. IPO momentum continues through the second quarter, or whether issuers decide the risk now isn't worth it," said Samuel Kerr, head of equity capital markets at Mergermarket. The debut will also test the limits of the AI hype, given increasing frustration over Big Tech's massive spending spree and fears of competition from China's artificial intelligence startup DeepSeek. While investors have propelled AI-related companies such as Nvidia and Microsoft to stratospheric valuations, CoreWeave has stirred concerns among risk-averse investors. The company provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77% of CoreWeave's revenue last year came from just its top two customers, including Microsoft. At its roadshow, some expressed worries about CoreWeave's heavy reliance on Microsoft as the tech behemoth's shifting AI data center strategy could impact long-term demand for chips. CoreWeave's capital-intensive business model also raised questions about sustainability, sources said. "I don't know how receptive the market's going to be," said Kamran Ansari, managing partner at Kapital Ventures, noting that while the growth of the company has been meteoric, its long-term sustainability is yet to be tested. CoreWeave had around $8 billion in debt as of last year. The company said earlier this month it plans to use about $1 billion of the IPO proceeds to pay down debt. It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. While investors appear comfortable with the company's high leverage since it has strong free cash flow, the risk of commitments not being fulfilled remains a worry. The startup has also consistently posted losses, and IPO investors in the last few years have been wary of backing companies with no history of profitability. FROM CRYPTO TO AI Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after Ethereum's 2022 upgrade, "The Merge," slashed rewards for miners. It signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, forging ties with the most prominent startup in the industry. CoreWeave's revenue has also grown at a breakneck pace, climbing more than eight-fold last year. But it may need to do more to convince investors. "For most venture-backed deep tech startups, it's going to take more than hype to make it through the public markets right now," said Anthony Georgiades, founder and general partner at Innovating Capital. CoreWeave's shares are set to trade under the symbol "CRWV". The IPO was underwritten by a syndicate of 18 banks, including Morgan Stanley, and Goldman Sachs. Sign in to access your portfolio
Reuters
28-03-2025
- Business
- Reuters
Nvidia-backed CoreWeave's shares likely to open up to 25% above IPO price
March 28 (Reuters) - CoreWeave's (CRWV.O), opens new tab shares were set to open up to 25% above their offer price in the company's debut on the Nasdaq on Friday. The Nvidia-backed AI infrastructure firm's stock was indicated to trade at $50, compared with the IPO price of $40. here. At the higher end, it could notch a valuation of around $29 billion on a fully diluted basis. The first major AI startup to list in recent years suffered a setback on Thursday when it downsized its initial public offering. A strong debut would be a welcome sign, offering hope to other IPO candidates that smooth listings are achievable with tempered valuations, but a lackluster performance may deepen skepticism at a time when equity markets are already grappling with tariff-related turmoil. "The U.S. IPO market is at an inflection point. This next batch of deals will determine whether the U.S. IPO momentum continues through the second quarter, or whether issuers decide the risk now isn't worth it," said Samuel Kerr, head of equity capital markets at Mergermarket. The debut will also test the limits of the AI hype, given increasing frustration over Big Tech's massive spending spree and fears of competition from China's artificial intelligence startup DeepSeek. While investors have propelled AI-related companies such as Nvidia (NVDA.O), opens new tab and Microsoft (MSFT.O), opens new tab to stratospheric valuations, CoreWeave has stirred concerns among risk-averse investors. The company provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77% of CoreWeave's revenue last year came from just its top two customers, including Microsoft. At its roadshow, some expressed worries about CoreWeave's heavy reliance on Microsoft as the tech behemoth's shifting AI data center strategy could impact long-term demand for chips. CoreWeave's capital-intensive business model also raised questions about sustainability, sources said. "I don't know how receptive the market's going to be," said Kamran Ansari, managing partner at Kapital Ventures, noting that while the growth of the company has been meteoric, its long-term sustainability is yet to be tested. CoreWeave had around $8 billion in debt as of last year. The company said earlier this month it plans to use about $1 billion of the IPO proceeds to pay down debt. It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. While investors appear comfortable with the company's high leverage since it has strong free cash flow, the risk of commitments not being fulfilled remains a worry. The startup has also consistently posted losses, and IPO investors in the last few years have been wary of backing companies with no history of profitability. FROM CRYPTO TO AI Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after Ethereum's 2022 upgrade, "The Merge," slashed rewards for miners. It signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, forging ties with the most prominent startup in the industry. CoreWeave's revenue has also grown at a breakneck pace, climbing more than eight-fold last year. But it may need to do more to convince investors. "For most venture-backed deep tech startups, it's going to take more than hype to make it through the public markets right now," said Anthony Georgiades, founder and general partner at Innovating Capital. CoreWeave's shares are set to trade under the symbol "CRWV". The IPO was underwritten by a syndicate of 18 banks, including Morgan Stanley, and Goldman Sachs.
Reuters
28-03-2025
- Business
- Reuters
CoreWeave's retail appeal may be tempered by IPO timing, financial pressures
March 28 (Reuters) - Concerns sparked by CoreWeave's debt pile and other financial challenges may weigh on retail investor enthusiasm as it prepares to go public after what analysts said was a poorly timed IPO. The Nvidia-backed AI infrastructure company, which focuses on data centers and cloud services, is listing at a time when the equity markets are under pressure from tariff uncertainty and on rising concerns over the competition posed by China's artificial intelligence startup DeepSeek. Frustration is also mounting over when Big Tech's massive investments in AI will yield returns, leading to concerns CoreWeave may have missed the ideal window to list its shares. "It feels like the IPO was poorly timed. Had it floated a year ago, demand might have been much stronger than now as AI interest has started to wane," Dan Coatsworth, investment analyst at AJ Bell, said. The listing comes at a time when IPO-bound companies, even in the most high-profile sectors, have been under intense scrutiny. Despite a recovery, the IPO market is nowhere near the pandemic years when listings had soared. CoreWeave already suffered a setback on Thursday when it downsized its IPO. Under the new terms, it fetched a fully diluted valuation of around $23 billion compared with the $32 billion it was targeting earlier. "It's got a lot of risks. I don't know what is the long-term sustainability of the business," said Kamran Ansari, managing partner at Kapital Ventures. CoreWeave's revenue jumped more than eight-fold last year, but sustaining that growth will be critical. "There will be risks over the longer term around the company maintaining its impressive growth and not missing earnings estimates," said Samuel Kerr, head of equity capital markets at Mergermarket. CoreWeave had about $8 billion in debt as of last year. The company said earlier this month that it plans to use about $1 billion of the IPO proceeds to reduce debt. Some investors have also flagged concerns about the company's heavy reliance on Microsoft (MSFT.O), opens new tab, whose shifting AI data center strategy could impact long-term demand for chips known as graphics processing units, or GPUs. AI HYPE Top AI players have sparked massive interest from retail investors in recent years. Nvidia, Microsoft, Amazon (AMZN.O), opens new tab, Apple (AAPL.O), opens new tab and Alphabet (GOOGL.O), opens new tab were among the top 20 stocks drawing retail investor inflows in 2024, according to Vanda Research. Some experts have also brushed aside concerns stemming from DeepSeek, noting that heightened competition will drive more investment rather than leading to cutbacks. "AI remains a very hot investment theme despite doubts earlier this year following the emergence of DeepSeek," Mergermarket's Kerr said. Those seeking opportunities beyond the top tech names may back CoreWeave. Net inflows from retail investors into U.S. equities and exchange-traded funds totaled $69.8 billion as of March 25 this year, only slightly below the $71.7 billion invested in the final quarter of 2024, according to Vanda Research. "Retail investors will be drawn to (CoreWeave) as they continue to look for other avenues of returns away from the potentially lackluster performance of the MAG7 (Magnificent Seven) stocks," Josef Schuster, CEO of IPO research firm IPOX, said. The Magnificent Seven - a group of tech giants that have driven much of the stock market's gains in recent years - have been battered so far in 2025. CoreWeave did not immediately respond to a request for comment. It is set to debut later on Friday.
Yahoo
13-02-2025
- Business
- Yahoo
Reddit, Pinterest, Snap: The hidden AI players worth watching
Headline Venture Partner Kamran Ansari joins Asking for a Trend discuss investment opportunities beyond Big Tech in the artificial intelligence sector. Ansari notes that among Big Tech names, "it's an arms race" to get ahead in artificial intelligence, emphasizing that "they're investing for the future." He distinguishes between companies like Alphabet (GOOG, GOOGL), Amazon (AMZN), and Microsoft (MSFT), whose stocks are down as they invest in AI to resell through client services, versus Meta Platforms (META), whose stock is up as they invest further in AI for internal use. However, he highlights smaller social media platforms Pinterest (PINS), Reddit (RDDT), and Snap Inc. (SNAP). "Those are smaller companies that are not in this arms race," he explains, adding that for them, "the name of the game is eyeballs" as they focus on monetizing their existing user bases. Watch the full video above to hear Ansari's outlook on DeepSeek's impact on the AI market. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. This post was written by Angel Smith Sign in to access your portfolio
Yahoo
13-02-2025
- Business
- Yahoo
Reddit, Pinterest, Snap: The hidden AI players worth watching
Headline Venture Partner Kamran Ansari joins Asking for a Trend discuss investment opportunities beyond Big Tech in the artificial intelligence sector. Ansari notes that among Big Tech names, "it's an arms race" to get ahead in artificial intelligence, emphasizing that "they're investing for the future." He distinguishes between companies like Alphabet (GOOG, GOOGL), Amazon (AMZN), and Microsoft (MSFT), whose stocks are down as they invest in AI to resell through client services, versus Meta Platforms (META), whose stock is up as they invest further in AI for internal use. See for yourself — The Yodel is the go-to source for daily news, entertainment and feel-good stories. By signing up, you agree to our Terms and Privacy Policy. However, he highlights smaller social media platforms Pinterest (PINS), Reddit (RDDT), and Snap Inc. (SNAP). "Those are smaller companies that are not in this arms race," he explains, adding that for them, "the name of the game is eyeballs" as they focus on monetizing their existing user bases. Watch the full video above to hear Ansari's outlook on DeepSeek's impact on the AI market. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. This post was written by Angel Smith One of the key trends from this earnings season is big tech betting big on AI, but our next guest says investors can also look at smaller mid-cap names like Reddit, Pinterest, Snapchat. Here to explain why is Cameron Ansari, headline venture partner. Always good to see you in studio. Good to see you again. Thank you. So Cameron, let's talk about these semi names. So one on your radar was Reddit. They reported after the bell today, they're in the red in the after hours. Or maybe some some disappointment about Q4 user growth. Of course the stock had also been a rocket ship since the IPO in March, but I'm curious, you name Reddit and Pinterest and Snap, and your point being, hey, these are the, the kinds of names that maybe we see stronger investor interest in going forward. How come? What, what are the common themes and trends that connect these? Well, the, the big four names, right, they were reported in the last week, uh. Meta, Amazon, Google and Microsoft, each of them reported massive upticks in capex on AI. It's, you know, it's an arms race, uh, and now, you know, China's entered the market as well, obviously, and so, uh, it is a real race to get ahead and build foundational models and foundational layers right now to build the, you know, put the concrete and the cement in and and the steel to build your house on top of, right? So they're investing for the future. And you saw 3 of those 4 names they're down about 5-10% this week. The one that's not is meta, and the distinguishing feature is the other three are spending in order to then resell AI services to clients and businesses, whereas meta is really building it for their own internal use, uh, to make their ads more effective, to make the targeting more effective on Instagram and WhatsApp and Facebook. So, uh, it's all for internal use, and the investors feel that's a better investment and so MT has been rewarded with the monster week, you know, they're up 5% 10% this week with the other 3 are down. Uh, and then you have the other three names that I mentioned. Obviously I spent a lot of time at Pinterest. I know that I know that name best, but those are smaller companies that are not in this arms race, right? They're not spending on giant AI data centers to power reseller businesses to do data cloud like Google Cloud or Microsoft's Azure service. These are consumer oriented names, high margin. They operate simple businesses where they. Ads and so they're not in this cap X race. They're basically monetizing their own users, which is why when a Reddit misses on user count, you see the big hit because the name of the game is eyeballs. Let me ask you, in this mega AI trend we're talking about small cap, big cap tech spending, spending, spending, what did you think of Deep Seek this cheaper, allegedly cheaper open source. AI model when that hits, there's a lot of people guessing, well, what does this mean for the broader trend in trade? How did you see it? I mean, it was like an extinction event last Monday, right, when the the news came out andvi I think was down $500 billion the single largest single day loss of uh market cap in the history of the, the US stock exchange. So, uh, you know, people obviously panicked. I think they, they probably over panicked a little bit. Um, it's hard to know what's real and what's not. Obviously with news coming out of China, you know, is it really as cheap as they say? Is it really, you know, work as well as it does? Obviously developers are not building on it. They're banging on it. They're gonna take weeks and months to find out, hey, is it as good as opening eye or not? Yeah, we're not gonna know overnight, but, um, the fact that it even exists and offers an open source solution. Uh, that's compared to OpenAI and OpenEye, one of things we should talk about is the real cost of OpenAI has been deeply subsidized for customers by Microsoft. So most customers in the US use OpenAI and probably half my portfolio now uses it in some way or another. They're not paying the full price, right? They're not, they're not paying the full. They're paying the discounted rate that you get on like Expedia or something, not the rack rate, the hotel. At some point, the price is gonna have to go up to the rack rate, right, because the opening eye is, is hemorrhaging cash. They're spending so much money on these things. And so when the real price hits customers, you know, are they gonna be willing to pay? Are they gonna go to an open source model like Deepeek? And that's the real question. And the big challenge also Deep Seek brought into the market is, is it shattered the illusion. That somehow there'd be like American exceptionalism in AI and and made everyone wake up, hey, look, no, this is gonna be a global event. China's coming up really fast and they're gonna be other companies here. I have to get you since you're talking all things AI final question as a venture investor, right, you're talking to a lot of smart founders and entrepreneurs. What excites you when you're looking for opportunity right now? What verticals, what sectors you're seeing a lot around, um. Uh, services businesses like let's say accounting, legal, marketing, and taking those and applying AI and creating like applications that do those more efficiently, those are springing up very quickly and I think they're gonna become commoditized. The ones within the fintech space where I focus where I think AI has real value, uh, one is, um, around service customer support. You saw Klarna reduce their headcount by like 900 people or something remarkable by moving most of their service to AI. So in businesses that have a heavily consumer component the. They're relying on customer service and and help desks to leverage AI to reduce that headcount, that's a big deal. Uh, the other areas are fraud prevention, uh, as well as onboarding underwriting, so helping do loans better, more efficiently using AI, that's a big opportunity within FinTech. Cameron, always great to see you get your thoughts. Appreciate it. Thank you.
