BTC Miner Core Scientific Uniquely Positioned to Capture AI Demand, Initiate at Buy: Jefferies

As a seasoned research analyst with over two decades of experience under my belt, I’ve seen countless companies rise and fall in the tech sector. However, Core Scientific (CORZ) has piqued my interest with its strategic positioning to capitalize on the burgeoning AI market.

In a research report released on Monday, Jefferies highlighted that Core Scientific (CORZ) stands out as an ideal candidate to capitalize on the rising demand for artificial intelligence (AI), thanks to its extensive power resources and robust data center development team. This assessment was made when they initiated their coverage of the bitcoin mining company.

The bank assumed coverage of the stock with a buy rating and a $19 price target. The shares were 1.7% higher at $13.60 in early trading.

Analysts Jonathan Petersen and Jan Aygul stated that it’s likely several large technology firms will keep a close eye on the progress of CoreWeave. If the developments prove successful, it may persuade key decision makers to agree on future lease contracts for further development with CORZ.

In June, Core entered into a significant 12-year AI agreement with the hyperscaler CoreWeave, marking a milestone in the broader tech industry.

According to Jefferies, the Bitcoin miner is anticipated to expand its roster of tenants to include additional hyperscale companies. They pointed out that management expects to disclose more details about this by the end of the year.

According to Jefferies, while future AI contracts might not offer as lucrative terms as the CoreWeave lease, they are anticipated to yield substantial profits.

The company’s Bitcoin mining activities continue to be financially viable and are becoming even more energy-efficient, as stated in the message.

The growth of Core’s Bitcoin mining operations is unlikely in the near future, but it’s predicted that they will eventually settle at a constant level of ASIC miners. Over time, they are expected to replace or update this mining equipment. This information was also included in the report.