CoreWeave: Shades of Amazon's Growth-First Strategy

Core Insights - CoreWeave has achieved a significant milestone by becoming the fastest cloud provider to reach $5 billion in annual revenue, with total annual revenue increasing from $1.9 billion in 2024 to $5.1 billion in 2025, representing a 168% growth [1] - The company's revenue backlog has surged to $66.8 billion, more than quadrupling from $15 billion at the beginning of the year, indicating strong future demand [2] - CoreWeave received a $2 billion investment from Nvidia, enhancing its position as a preferred partner for Blackwell GPU deployments and the first to deploy Nvidia GB300 NVL72 systems [2] Growth Challenges - Despite strong growth, CoreWeave's shares have declined from their peak of approximately $187 due to three main factors: the expiration of the IPO lock-up period, sales by early investor Magnetar Capital, and a significant debt load incurred to meet rising demand [3][4] - The expiration of the IPO lock-up period in August is expected to reduce insider selling pressure over time [5] - Magnetar Capital, while having sold some shares, has indicated no plans for further divestment, suggesting continued confidence in CoreWeave's long-term prospects [5] Strategic Positioning - CoreWeave's growth strategy is likened to that of Amazon, focusing on substantial upfront investments with the expectation of high long-term margins once infrastructure is established [6] - The company is prioritizing growth over short-term profitability, similar to Amazon's historical approach [8] - The volatility in CoreWeave's stock is viewed as a result of its rapid scale rather than fundamental weaknesses, supported by a large backlog and strong backing from Nvidia [7]