Core Scientific's Strategic Move in Bitcoin Mining Assets Deal Sparks Analyst Optimism

Core Scientific Analyst Emphasizes 'Access To Power' In Bitcoin Mining Assets - Deal With CoreWeave Under Focus - Core Scientific (NASDAQ:CORZ)

Long term - the analyst sees the potential for shares to be multiples higher than the current price target. Cantor Fitzgerald analyst Brett Knoblauch initiated coverage on Core Scientific, Inc. CORZ, with a price forecast of $20. According to the analyst, Bitcoin miners currently have one of the most coveted assets in the world - access to power. In June 2024, Core Scientific announced a deal with CoreWeave (private), following which shares went up meaningfully. With CoreWeave, Core Scientific was the first Bitcoin miner to sign a meaningful AI/HPC deal. In what has now been extended, CoreWeave will lease 270 MW from Core Scientific for 12 years, and pay the company a total of $4.725 billion over that duration, amounting to ~$1.45 million per MW. Also Read: Block and Core Scientific Enter Supply Agreement for Mining ASICs What is most differentiated about this deal that other miners will not be able to replicate is the fact that CoreWeave will fund the entire capex buildout itself (~$1.3 billion). Per the analyst, this is effectively an interest-free loan for CoreWeave, which can use the annuity like revenue stream to fund additional capacity expansion, and to potentially lever up the business to maximize equity returns. Core Scientific has earmarked an additional 322 MW for AI/HPC, which could generate an additional $335 million in annual revenue and $268 million in annual profits. Long term - the analyst sees the potential for shares to be multiples higher than the current price target. Price Action: CORZ shares are trading lower by 5.17% to $11.10 at last check Wednesday. Image via Shutterstock Read Next: NIO Advances Vehicle Safety With AI-Enhanced Automatic Emergency Braking And Navigation Features In Latest Update Market News and Data brought to you by Benzinga APIs

Core Scientific shares rise on new Overweight rating By Investing.com

On Wednesday, Core Scientific Inc. (NASDAQ: CORZ) received a new Overweight rating from Cantor Fitzgerald, accompanied by a $20.00 price target. The firm highlighted Core Scientific's strategic shift following its June 3, 2024, partnership with CoreWeave, emphasizing the transformational impact of the deal on the Bitcoin mining industry. The Cantor Fitzgerald analysis pointed out that Bitcoin miners are in possession of a highly sought-after resource: access to power. The firm underscored the increasing demand for energy by large entities, particularly for powering GPUs in the context of rising AI investments. Core Scientific's recent deal is seen as an underappreciated move that positions the company advantageously in terms of cost of capital for expanding capacity and the overall flexibility it has in leveraging its 500 MW of Bitcoin mining capabilities. The firm's evaluation suggests that Core Scientific's assets will grow in importance due to the anticipated power consumption needs for AI, as inferred from scenario sales estimates of Nvidia (NASDAQ:NVDA) and CoreWeave's fundraising activities. With the existing scarcity of power in the U.S. grid, Core Scientific's early initiatives are expected to give it a leading edge in the AI/HPC data center market. Cantor Fitzgerald's assessment concludes that Core Scientific stands at the forefront of the AI/HPC data center race, which is crucial for the advancement of AI. The firm believes that the risk/reward profile for Core Scientific is currently very appealing, given its position and potential in the evolving market. In other recent news, Core Scientific has been making significant strides in the digital infrastructure and bitcoin mining industry. H.C. Wainwright has maintained a Buy rating on Core Scientific, reflecting confidence in the company's strategic partnerships and position within the evolving bitcoin mining industry. The firm's reaffirmed $15 price target indicates the company's potential growth, particularly following its recent machine deal with Block-ePIC. Core Scientific has secured high-performance computing (HPC) hosting contracts totaling 270 megawatts, projected to generate over $4.7 billion in revenue over the next 12 years. Additionally, the company has expanded its hosting agreement with CoreWeave, which is expected to generate an additional $1.225 billion in cumulative revenue. The company's operational infrastructure has grown to 832 MW following a 72 MW expansion at its Denton, Texas data center. Furthermore, Core Scientific's CEO, Adam Sullivan, has secured a new employment agreement that includes a base salary of $625,000 and an annual incentive target of 125% of the base salary, contingent upon performance criteria. As Core Scientific Inc. (NASDAQ: CORZ) garners attention with its strategic moves and new Overweight rating from Cantor Fitzgerald, real-time data and insights from InvestingPro provide additional layers to the investment narrative. With a significant market capitalization of $2.08 billion, Core Scientific's financial health and growth prospects can be further understood through key metrics. The company's P/E ratio, standing at a lofty 86.3, suggests that investors are willing to pay a premium for its earnings potential, buoyed by the expectation of net income growth this year, as indicated by one of the InvestingPro Tips. Moreover, the impressive quarterly revenue growth of 48.6% underscores the company's expanding operations. Investors may also note the substantial price movements, with Core Scientific experiencing a 19.75% return over the last week, and an even more remarkable 333.33% return over the last three months. Such strong performance is reflective of the positive market sentiment and the company's recent strategic partnership, which aligns with the insights from Cantor Fitzgerald regarding Core Scientific's positioning in the AI/HPC data center market. For those considering an investment in Core Scientific, there are additional InvestingPro Tips available that shed light on the stock's valuation and momentum. The company is currently trading near its 52-week high, which may suggest a moment of caution for investors looking for entry points. To explore these tips further and gain a more comprehensive investment perspective, visit https://www.investing.com/pro/CORZ. Additionally, readers can benefit from an exclusive offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking access to a wealth of investment insights. InvestingPro has 11 more tips available that can guide investors through the complexities of the market and Core Scientific's place within it, providing a robust toolset for informed decision-making in the dynamic landscape of Bitcoin mining and AI data center investments.