Why Shares of CoreWeave Are Soaring Today

CoreWeave Overview - CoreWeave's shares increased by 15% following the announcement of a $14.2 billion deal with Meta Platforms to provide cloud computing capacity through 2031 [1][2] - The deal includes an option for Meta to expand its commitment for additional cloud computing capacity through 2032 [2] Business Model and Partnerships - CoreWeave operates data centers equipped with Nvidia's latest graphics processing units (GPUs) and rents out capacity primarily for artificial intelligence (AI) applications [3][7] - The company has recently expanded its agreement with OpenAI for an additional $6.5 billion, indicating strong demand for its services [4] Market Position and Financials - CoreWeave is approaching a market cap of $70 billion but is not yet profitable, trading at approximately 13 times forward expected sales [5] - The company has a high debt-to-equity ratio of over 8.3, raising concerns about its financial stability [5] Industry Outlook - As long as companies continue to invest in AI infrastructure, CoreWeave is positioned to benefit from this trend [5][7]