What’s the most exciting initial public offering (IPO) of 2025? My vote would go to CoreWeave(NASDAQ: CRWV). Its IPO was the biggest for a tech stock since 2021.
Sure, CoreWeave had to lower its planned IPO share price. However, that was due more to broader market headwinds than anything related to the company itself. At any rate, CoreWeave stock has nonetheless performed exceptionally well. It ranks among the biggest large-cap winners of the year.
But that’s all water under the bridge now. Where will CoreWeave stock be in five years?
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To make an educated guess about CoreWeave’s prospects, we have to first understand its business. The company is one of a handful of artificial intelligence (AI) hyperscalers. Its sole focus is providing infrastructure designed to support the workloads of AI systems, especially generative AI applications.
The most important factor affecting where CoreWeave stock will be in 2030 is almost certainly how strong the demand for AI infrastructure will be through the rest of the decade. As of right now, the prognosis looks great. Exhibit A is that CoreWeave’s revenue more than tripled year over year in its latest quarter.
Next on the list, in my view, is how well CoreWeave can keep up with the demand. CEO and co-founder Michael Intrator said in the company’s Q2 update, “We are scaling rapidly as we look to meet the unprecedented demand for AI.” Such a massive buildout is expensive. That’s the main reason CoreWeave remains unprofitable.
Electricity supply could also be a constraint. Consulting giant Deloitte estimates that power demand from U.S. AI data centers could skyrocket more than 30x by 2035 to 123 gigawatts.
CoreWeave’s future hinges on a third factor, too: competition. The hyperscaler’s rivals include some of the biggest companies on the planet with exceptionally deep pockets. If AI infrastructure demand slows, the competitive threats could become more pronounced.
With those factors in mind, let’s explore a few potential scenarios for CoreWeave. I’ll start with the most optimistic one.
The AI demand we’ve seen thus far could be only the tip of the iceberg. Agentic AI remains in its early stages of adoption. Artificial general intelligence (AGI) and artificial superintelligence (ASI) aren’t the stuff of science fiction anymore. Major companies are investing heavily in developing these game-changing AI breakthroughs.
In this scenario, CoreWeave’s growth would be impressive. The company could probably generate revenue of over $200 billion in 2030. At the current average price-to-sales ratio of 8 for the internet services and infrastructure industry, that would translate to a market cap for CoreWeave of at least $1.6 trillion — a gain of roughly 23x in five years.
One wrinkle in this scenario, though, is that the biggest hyperscalers could view CoreWeave as an attractive acquisition target to boost their own capacity. The purchase price would depend on the timing of such a potential buyout: The earlier in the AI infrastructure explosion, the less expensive acquiring CoreWeave would be.
In this scenario, AI infrastructure demand continues to grow at a robust (although not explosive) pace. We probably wouldn’t see AGI or ASI emerge over the next five years. However, agentic AI could gain more widespread adoption.
I think CoreWeave could realistically rake in revenue in the ballpark of $60 billion in this scenario. That number reflects an increase of around 12x from Wall Street’s consensus revenue estimate for 2025. Using the average industry P/S multiple of 8, that would put CoreWeave’s market cap at $480 billion or so. Its share price would need to grow nearly 7x to hit that mark.
Now, let’s suppose AI infrastructure demand tapers off dramatically. This scenario would likely be devastating for CoreWeave. Its stock already has significant growth baked into the share price with a P/S ratio of 19.
If CoreWeave fell to the current industry average P/S multiple, its stock could plunge by at least 50%. However, I suspect that the average would itself decline quite a bit if AI infrastructure demand slowed to a crawl. A decline of 70% or more for CoreWeave’s share price probably wouldn’t be out of the question in this scenario.
The easiest prediction for CoreWeave in 2030 is to go with something along the lines of the middle-of-the-road scenario mentioned above. Even if that scenario is still overly optimistic, I could easily see CoreWeave being worth at least $200 billion by the end of the decade. A gain of almost 3x in just five years isn’t too shabby.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
