On Wednesday, B.Riley announced an upgrade of Core Scientific's stock rating, moving from Neutral to Buy. The financial firm also significantly increased the price target for the company's shares to $13.00, a substantial jump from the previous target of $0.50. This adjustment reflects Core Scientific's ongoing expansion into High-Performance Computing (HPC).
The company, traded on OTC markets under the ticker OTC:CORZQ, has been recognized for its proficiency in digital mining. B.Riley's optimistic outlook is based on Core Scientific's potential to become a prominent player in HPC hosting.
The rationale behind the positive stance includes the advantageous economics of recent deals with CoreWeave and the Core Scientific management team's extensive experience in operating enterprise data centers.
Core Scientific has a history of hosting CoreWeave's GPUs, a collaboration from 2019 to 2022. The team at Core Scientific is noted for including former operators from renowned tech companies such as Hewlett Packard Enterprises and Equinix.
B.Riley's revised valuation model for Core Scientific combines a multiple-based approach with Net Present Value (NPV) calculations of both current and anticipated HPC contracts. This comprehensive assessment underpins the firm's decision to set the new price target at $13 and upgrade the stock to a Buy rating.
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