Despite a significant downturn earlier this week, Bernstein maintains a positive outlook on Core Scientific (CORZ), following a 30% drop in the company's share price. The decline occurred amidst a challenge from DeepSeek, a Chinese artificial intelligence (AI) startup, which questioned the valuation of bitcoin (BTC) miners from a data centre perspective.
In their research report published Thursday, Bernstein highlighted that the recent stock slide has created a buying opportunity, positioning it at a deep discount. Core Scientific has been described as the "leader of the pack" among AI-focused mining operations. The firm boasts an available power supply of 1.3 gigawatts (GW) and is engaged in a significant 12-year AI agreement with CoreWeave.
Analysts led by Gautam Chhugani noted, "Bitcoin miners have a 12-18 month finite window to build a hybrid data center business, while the hyperscaler capex remains consistent." The firm is reportedly on track to launch its first cluster of data centres in the first half of this year and continues to acquire and develop additional power sites.
As of now, Core Scientific's stock is trading at valuations more aligned with bitcoin mining than with traditional data centres. This discrepancy is particularly notable given that approximately 70% of its capacity is dedicated to AI applications. Bernstein holds an outperform rating on Core Scientific's shares, setting a price target of $17. Early trading indicated a recovery, with the stock up 3.8% at $11.90.
The developments surrounding Core Scientific occur amid broader market trends impacting bitcoin mining and AI integration in technology infrastructure, highlighting an evolving landscape for businesses in these intersecting fields.
Source: Noah Wire Services