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Nvidia-Backed CoreWeave's IPO Comes In Below Expectations At $40 Per Share - JPMorgan Chase (NYSE:JPM), Goldman Sachs Group (NYSE:GS)

1. CoreWeave's IPO priced at $40, below expectations of $47 to $55. 2. CoreWeave grew revenue to $1.9 billion in 2024, but remains unprofitable. 3. Microsoft contributed 62% of CoreWeave's revenue, raising concentration risk. 4. JPMorgan is a primary book-running manager for the CoreWeave IPO. 5. CoreWeave plans international growth and infrastructure expansion amid strong AI demand.

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FAQ

Why Neutral?

JPM's participation in CoreWeave's IPO is promising but mitigated by CoreWeave's losses and revenue dependency on Microsoft, which clouds future growth prospects. Historically, IPOs can be volatile, affecting management companies more than underlying shares.

How important is it?

JPM's role as an underwriter links it to potential fee income, but risks remain due to CoreWeave's unprofitable status and reliance on a single client.

Why Short Term?

The immediate impact revolves around the IPO’s initial performance. Future growth prospects hinge on CoreWeave's ability to diversify its revenue streams.

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