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Investing.com - DA Davidson has reiterated an Underperform rating and $36.00 price target on CoreWeave (NASDAQ:CRWV) following the company’s announcement to acquire Core Scientific (NASDAQ:CORZ). According to InvestingPro data, Core Scientific currently trades at $14.84 with a market capitalization of $5.36 billion, and maintains a FAIR financial health score.
CoreWeave agreed to acquire former crypto miner Core Scientific in an all-stock transaction valued at approximately $9 billion, or $20.40 per share. The deal involves a fixed exchange ratio of 0.1235 CoreWeave shares for each Core Scientific share, with Core Scientific shareholders expected to own less than 10% of the combined company upon closing. Core Scientific’s current revenue stands at $410.91 million, though the company faces challenges with negative EBITDA of $14.9 million.
According to CoreWeave, the acquisition will immediately eliminate over $10 billion in future lease overhead for existing contractual sites. The company also stated the deal is leverage neutral while enabling access to a broader range of financing sources at more attractive capital costs.
This is reportedly not CoreWeave’s first attempt to acquire Core Scientific, as the company made an unsolicited non-binding proposal last June that was rejected for significantly undervaluing Core Scientific. The current deal is expected to close in the fourth quarter of 2025, pending regulatory approval and other customary closing conditions.
Core Scientific brings 1.3GW of power in its current portfolio and over 1GW of additional power capacity for expansion, with CoreWeave indicating the acquisition requires minimal incremental capital expenditure of $5 billion. DA Davidson expects the transaction to be dilutive this year and next, as Core Scientific adds more losses and negative free cash flow. However, InvestingPro analysis reveals that analysts expect Core Scientific to return to profitability this year, with 14 additional key insights available to subscribers through comprehensive Pro Research Reports covering 1,400+ top stocks.
In other recent news, Jefferies analysts have speculated on a potential acquisition involving CoreWeave and Core Scientific. The firm suggested that acquiring Core Scientific could help CoreWeave expand its data center capabilities and reduce reliance on third-party developers. Core Scientific is reportedly developing 590 megawatts (MW) of data center capacity for CoreWeave, and the acquisition could allow CoreWeave to vertically integrate its infrastructure and leverage Core Scientific’s platform. Jefferies estimated a potential takeout value range of $16-$23 for Core Scientific shares.
Meanwhile, Cantor Fitzgerald maintained its Overweight rating on Core Scientific, with a price target of $18.00. The firm highlighted the company’s partnership with CoreWeave and its capacity for artificial intelligence and high-performance computing (AI/HPC) as undervalued by the market. Cantor Fitzgerald also noted the potential upside in Core Scientific’s Bitcoin mining operations, which are currently profitable.
JMP Securities also reiterated a Market Outperform rating for Core Scientific, setting a price target of $15.00. The firm emphasized Core Scientific’s significant growth potential, particularly in its high-performance computing business, which could significantly enhance the company’s value over time. Core Scientific emerged from bankruptcy earlier this year and is focusing on leveraging its contracted power capacity to maximize growth and profitability.
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