CoreWeave CEO explains why its $8 billion debt is not a red flag for investors

CoreWeave’s debut last week did not receive the kind of explosive response that many had hoped for – partly because the AI cloud infrastructure company has significant debt on its balance sheet.

Tech companies usually go public with a clean balance sheet, but CoreWeave did with about $8 billion in debt.

However, the debt shouldn’t really be off putting for investors as it’s “the engine, the fuel for this company,” Mike Intrator, the chief executive of CoreWeave, said in a CNBC interview on Friday.

“Whenever you see debt on our balance sheet, you’re going to see an offsetting revenue contract that is larger,” he added.

CEO Intrator’s view on CoreWeave stock

CoreWeave Inc ended its first day on Nasdaq at about $40 – the same price at which the company offered shares in its IPO.  

Despite being an AI stock, investors did not run into CRWV as it went public on Friday. Still, the company’s top boss, Mike Intrator, continues to see better days ahead for CoreWeave stock.

Market will take some time to figure out what we do, and how we do it. The compute we deliver, the software we deliver it on, is a performance driver. That’s what will bring clients back to us again.

The chief executive also touted CoreWeave’s collaboration with Nvidia on the interview, saying the two companies have been incredible partners for each other.

Cramer sounded bullish on CRWV as well

Earlier in March, CoreWeave signed a $12 billion agreement with OpenAI that Intrator said further negates fears of a potential artificial intelligence slowdown.

“I have clients, they need compute, they want us to build bigger, faster. So, there are folks seeing an air pocket in the data centre, but that is not what my clients are telling me,” he told Jim Cramer.

The former hedge fund manager himself touted CRWV on “Mad Money” as one of the companies that fixes data centres and minimises downtimes much faster than its rivals.

Plus, the world has only started to scratch the surface on autonomous vehicles and robotics, which also signals artificial intelligence will be a decades-long phenomenon that’s not even close to its peak yet, he added.

CoreWeave CEO is happy with the IPO performance

In the near term, however, CEO Mike Intrator agreed there are headwinds in the AI space.

In fact, CoreWeave had to downsize its IPO because of them.

But what’s more important is that CRWV still went public amidst a challenging macroeconomic backdrop, which he dubbed “transformative for our company.”

Pricing the IPO at $40 and ending the first day on Nasdaq at about the same price was a job well done, he concluded.

Note that CoreWeave has partnerships with a bunch of big names other than Nvidia as well.

These include Microsoft, Mistral AI, Cohere, and Meta Platforms.

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