Street Calls of the Week
Core Scientific, Inc. (NASDAQ:CORZ), a prominent player in the blockchain infrastructure and digital asset mining sector with a market capitalization of $5.36 billion, has been navigating a transformative period marked by strategic shifts and market challenges. The company’s stock has demonstrated remarkable momentum, posting strong returns across multiple timeframes, including a 75% gain over the past year according to InvestingPro data. The company’s journey from a pure-play Bitcoin miner to a diversified technology infrastructure provider has caught the attention of investors and analysts alike, prompting a closer examination of its potential in the evolving digital landscape.
Company Overview
Core Scientific operates in two primary segments: Bitcoin mining and hosting services. The company has recently been expanding its focus to include artificial intelligence and high-performance computing (AI/HPC) infrastructure, signaling a strategic pivot to capitalize on emerging technological trends.
Recent Performance
Core Scientific’s recent performance has been a mixed bag, reflecting the volatile nature of the cryptocurrency market and the company’s ongoing transition. While the company mined 247 Bitcoin in March 2025, an increase from 215 in February, InvestingPro analysis reveals that revenue declined by 27% in the last twelve months to $410.91 million. The stock is currently trading near its 52-week high of $18.63, with InvestingPro’s comprehensive analysis suggesting the stock may be overvalued at current levels. However, this came alongside a decline in energized hash rate to 18.1 EH/S from 18.4 EH/S, attributed to a decrease in fleet count. Despite the smaller fleet, the company managed to improve fleet efficiency slightly to 24.3 J/TH.
The company’s stock has faced significant headwinds, with a reported decline of approximately 32% year-to-date as of March 2025. This downturn has been attributed to various factors, including market perception of Core Scientific as a proxy for its partner CoreWeave’s unsecured debt and general volatility in the cryptocurrency sector.
Future Outlook
Core Scientific’s future prospects are closely tied to its ability to execute its expansion plans and diversify its revenue streams. The company is on track to bring additional megawatts (MW) of capacity online throughout 2025, with 48 MW expected in Q2, 90 MW in Q3, and 95 MW in Q4. By the end of 2025, Core Scientific anticipates a run-rate colocation revenue of approximately $360 million.
A significant driver of future growth is the company’s partnership with CoreWeave, which is expected to generate substantial revenue and profit. Management has expressed confidence in reducing CoreWeave’s share to less than 50% of billable capacity by the end of 2028, indicating a strong push for customer diversification.
AI/HPC Business Expansion
The company’s pivot towards AI and HPC infrastructure is a strategic move to capitalize on the growing demand for advanced computing capabilities. Core Scientific’s contract locations for CoreWeave have been disclosed, including sites in Texas, Georgia, Oklahoma, and North Carolina. Notably, the Denton site is slated to support OpenAI, potentially creating one of the world’s largest GPU clusters.
This expansion into AI/HPC is viewed positively by analysts, who see it as a way for Core Scientific to differentiate itself from traditional Bitcoin mining operations and tap into a rapidly growing market segment.
Bitcoin Mining Operations
While Core Scientific continues its Bitcoin mining operations, the company is transitioning away from providing monthly Bitcoin mining updates. This shift in reporting strategy may indicate a reduced emphasis on this aspect of the business as the company diversifies its operations.
The company is expected to receive advanced mining rigs from Block (NYSE:SQ) in the second half of 2025, which could enhance its mining efficiency and output. However, the impact of these new rigs on overall performance remains to be seen, given the company’s evolving business model.
Financial Position
Core Scientific maintains a strong cash position, reported at $836 million, which provides substantial liquidity for its expansion plans. According to InvestingPro data, the company operates with a moderate level of debt, with a total debt of $1.19 billion. Notably, the company’s current ratio of 4.26 indicates that liquid assets significantly exceed short-term obligations, providing financial flexibility for its expansion plans. InvestingPro subscribers have access to over 15 additional financial tips and comprehensive analysis of Core Scientific’s financial health, which currently rates as "FAIR" based on multiple factors.
Analysts have adjusted their financial models for Core Scientific, reflecting updated capacity energization timing and changes in Bitcoin mining expectations. While there has been a slight reduction in the 2026 revenue estimate, there is an increase in the adjusted EBITDA estimate, suggesting potential improvements in operational efficiency.
Bear Case
How might Core Scientific’s dependence on CoreWeave affect its future stability?
Core Scientific’s heavy reliance on CoreWeave as a primary customer poses significant risks to its long-term stability. While the partnership has been a key driver of growth, it also exposes the company to concentration risk. If CoreWeave were to face financial difficulties or decide to reduce its reliance on Core Scientific’s infrastructure, it could have a severe impact on Core Scientific’s revenue and growth prospects.
Moreover, the market’s perception of Core Scientific as a proxy for CoreWeave’s unsecured debt has already negatively affected the stock’s valuation. This association could continue to weigh on investor sentiment, potentially limiting the company’s ability to raise capital or pursue strategic opportunities independently.
What risks does the company face in the volatile Bitcoin mining industry?
The Bitcoin mining industry is known for its volatility, which presents ongoing challenges for Core Scientific. Fluctuations in Bitcoin prices directly impact the profitability of mining operations, and the company has already experienced declines in mining output and hash rate. The upcoming Bitcoin halving event, which will reduce mining rewards, could further squeeze profit margins.
Additionally, the industry faces increasing regulatory scrutiny and environmental concerns regarding energy consumption. These factors could lead to higher operational costs or restrictions on mining activities, potentially impacting Core Scientific’s Bitcoin mining business segment.
Bull Case
How could Core Scientific’s expansion into AI/HPC boost its long-term prospects?
Core Scientific’s strategic pivot towards AI and HPC infrastructure positions the company to capitalize on one of the fastest-growing segments in technology. The global AI market is projected to experience exponential growth, driven by advancements in machine learning, natural language processing, and computer vision.
By leveraging its existing data center expertise and infrastructure, Core Scientific can offer specialized hosting services for AI workloads, potentially commanding higher margins compared to traditional hosting or Bitcoin mining. The company’s partnership with CoreWeave and its involvement in supporting major AI initiatives, such as OpenAI’s projects, demonstrate its capability to attract high-profile clients in this space.
Furthermore, as AI applications become more prevalent across industries, the demand for robust, scalable computing infrastructure is likely to surge. Core Scientific’s early mover advantage in this sector could lead to long-term contracts with enterprise clients, providing a more stable and predictable revenue stream compared to the volatile Bitcoin mining business.
What potential does the company have for diversifying its customer base beyond CoreWeave?
Core Scientific has expressed a clear intention to diversify its customer base, aiming to reduce CoreWeave’s share of billable capacity to less than 50% by the end of 2028. This goal suggests significant potential for customer acquisition and revenue diversification.
The company’s management has indicated that there are multiple large-scale deals in the pipeline, ranging from 50-100 MW with various enterprise clients. This demonstrates Core Scientific’s ability to attract interest from a broader range of customers, potentially including major technology companies, research institutions, and other organizations requiring high-performance computing resources.
Moreover, as Core Scientific continues to expand its capacity and develop expertise in AI/HPC infrastructure, it may be able to offer unique value propositions to clients looking for specialized hosting solutions. The company’s track record in managing large-scale data center operations for cryptocurrency mining could be leveraged to win contracts in the growing market for AI compute resources.
SWOT Analysis
Strengths:
- Strong cash position providing liquidity for expansion
- Expanding data center capacity and infrastructure
- Strategic focus on high-growth AI/HPC market
- Expertise in large-scale computing operations
Weaknesses:
- High dependence on CoreWeave as a primary customer
- Declining Bitcoin mining output and hash rate
- Significant debt burden
Opportunities:
- Growing demand for AI and HPC infrastructure
- Potential for large-scale deals with enterprise clients
- Diversification of revenue streams beyond Bitcoin mining
Threats:
- Volatility in Bitcoin prices affecting mining profitability
- Market perception as a proxy for CoreWeave’s debt
- Increasing competition in the AI/HPC hosting space
- Regulatory challenges in the cryptocurrency mining industry
Analysts Targets
- JMP Securities: $15.00 (May 22nd, 2025)
- Cantor Fitzgerald: $18.00 (May 8th, 2025)
- Cantor Fitzgerald: $16.00 (April 8th, 2025)
- Cantor Fitzgerald: $20.00 (March 6th, 2025)
This analysis is based on information available up to July 6th, 2025, and reflects the company’s status and market conditions as of that date. For the most comprehensive analysis of Core Scientific, including detailed financial metrics, Fair Value estimates, and expert insights, visit InvestingPro. The platform offers exclusive access to over 15 additional ProTips, advanced valuation models, and a detailed Pro Research Report that transforms complex financial data into actionable intelligence for smarter investing decisions.
InvestingPro: Smarter Decisions, Better Returns
Gain an edge in your investment decisions with InvestingPro’s in-depth analysis and exclusive insights on CORZ. Our Pro platform offers fair value estimates, performance predictions, and risk assessments, along with additional tips and expert analysis. Explore CORZ’s full potential at InvestingPro.
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