AUSTIN - Core Scientific, Inc. (NASDAQ: CORZ), a prominent provider of digital infrastructure for bitcoin mining and high-performance computing, has announced a significant expansion of its high-performance computing (HPC) hosting capabilities. The company revealed that CoreWeave, an AI Hyperscaler, has exercised an option to contract an additional 120 megawatts (MW) of critical IT load at one of Core Scientific's locations.
This new engagement, expected to begin modifications in the second half of 2025 and reach operational status in the latter half of 2026, will contribute approximately $2.0 billion to Core Scientific's projected cumulative revenue over a 12-year period. This addition brings the total potential revenue from CoreWeave's contracts to $8.7 billion.
Core Scientific's CEO, Adam Sullivan, stated that the company has fulfilled its goal of contracting around 500 megawatts of critical IT load for HPC hosting, positioning it to meet the growing demand for infrastructure that supports next-generation compute workloads. Sullivan emphasized the company's commitment to expanding its data center business and delivering value to clients and shareholders.
The company is actively working to increase power allocations at existing data centers and evaluating new sites to expand its HPC hosting capacity. Core Scientific, which currently operates eight data centers across the United States, aims to provide approximately 700 MW of digital infrastructure, supporting 500 MW of critical IT load for HPC hosting, while the remaining power is allocated to its bitcoin mining operations.
The capital investments required for the infrastructure modifications will be funded by CoreWeave. An estimated $180 million will be credited against hosting payments as capex credits. Furthermore, the contract with CoreWeave includes options for two renewal terms of five years each.
The successful execution of these contracts could rank Core Scientific among the largest publicly traded data center operators in the U.S. The company plans to leverage its 1.2 gigawatts of contracted power to support both its bitcoin mining business and alternative compute workloads.
This announcement is based on a press release statement and includes forward-looking statements, which are subject to risks and uncertainties. The actual results and the realization of the anticipated revenue and operational benefits could differ materially from those projected.
In other recent news, Core Scientific has seen a flurry of developments. The company reported a slight decrease in self-mined Bitcoin in September, producing 345 BTC. Despite this, Core Scientific's operations remain robust, owning approximately 175,000 ASIC miners. The company's expansion efforts are ongoing, with a 100 MW data center in Pecos, Texas, on schedule. Core Scientific has also initiated construction on a substation at its Muskogee, Oklahoma location, aiming to build a 100 MW data center equipped with liquid cooling systems designed for AI GPU cloud workloads.
B.Riley raised the stock price target for Core Scientific Inc. to $14.00 from $13.00, maintaining a Buy rating on the stock. This adjustment reflects the company's ongoing developments and operational updates. Canaccord Genuity initiated a Buy rating for Core Scientific, based on the company's recent deal with CoreWeave for high-performance computing hosting. Analysts from Cantor Fitzgerald and H.C. Wainwright also gave positive ratings, reflecting confidence in the company's recent developments.
Core Scientific's CFO, Denise Sterling, is set to step down by May 2025, and a search for her successor has been initiated. The company managed to reduce its financial burden by repaying $267 million in high-interest debt, a move made possible by the proceeds from its recent convertible senior notes offering. Core Scientific has secured $6.7 billion in high-performance computing contracts, including a 12-year agreement with CoreWeave, which is expected to contribute $2.0 billion to its cumulative revenue. These are the recent developments at Core Scientific.
InvestingPro Insights
Core Scientific's recent announcement of expanding its high-performance computing hosting capabilities aligns with several key financial metrics and trends highlighted by InvestingPro data. The company's market capitalization stands at $3.31 billion, reflecting investor confidence in its growth strategy.
InvestingPro Tips indicate that Core Scientific has demonstrated a "High return over the last year" and a "Strong return over the last three months," which correlates with the company's ambitious expansion plans and projected revenue growth. The stock is also "Trading near 52-week high," suggesting market optimism about the company's future prospects.
The revenue growth of 8.25% over the last twelve months and a more impressive 11.18% growth in the most recent quarter (Q2 2024) support Core Scientific's narrative of increasing demand for its services. Additionally, the company's EBITDA growth of 517.26% in the last twelve months is particularly noteworthy, indicating substantial improvement in operational efficiency.
However, it's important to note that despite these positive indicators, Core Scientific is currently "Not profitable over the last twelve months," with a negative EPS of -$2.81. This suggests that the company is prioritizing growth and expansion over immediate profitability, which aligns with its strategy to become one of the largest publicly traded data center operators in the U.S.
Interestingly, analysts predict that the company will be profitable this year, as noted in another InvestingPro Tip. This forecast, combined with the substantial projected revenue from the CoreWeave contracts, paints a promising picture for Core Scientific's financial future.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Core Scientific, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.