Ed Lin
Nvidia may be best known for artificial-intelligence chips, but the company hasn't been a slouch in some of its investing activity. An early stake in a hot stock has paid off enormously.
In April 2023, Nvidia invested $100 million in CoreWeave, long before that cloud provider's initial public offering this March. The 17.9 million preferred CoreWeave shares Nvidia purchased, at $5.58 each, were converted into an equivalent amount of common shares with the IPO. Nvidia invested another $250 million in CoreWeave's IPO, paying $40 a share for 6.25 million more shares.
All told, as of the end of March, Nvidia owned 24.2 million CoreWeave shares, a 7% stake, according to a form Nvidia filed with the Securities and Exchange Commission. Using a recent trading price of $83.42 -- already more than double the $40 IPO price -- that stake is valued at $2.02 billion, a paper profit of $1.67 billion on the $350 million Nvidia paid.
Nvidia declined to comment. It referred Barron's to CoreWeave's regulatory filings.
CoreWeave is a pure play on AI. All of its revenue comes from cloud-based rentals of AI servers that use Nvidia chips.
In April 2023, the same month Nvidia invested $100 million in CoreWeave, the two companies reached a master services agreement for CoreWeave to provide Nvidia with infrastructure and platform services. Through the end of 2024, Nvidia had paid CoreWeave about $320 million under the pact.
Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members -- so-called insiders -- as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at ed.lin@barrons.com
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