Tuesday, Core Scientific Inc. (NASDAQ: CORZ) received a positive outlook from H.C. Wainwright, with the firm raising its price target for the company's shares to $11.00, up from the previous $5.00. The firm maintained its Buy rating on the stock.
The adjustment in the price target reflects the potential growth stemming from Core Scientific's recently announced expansion. On June 3, the company unveiled a 200MW hosting expansion for its CoreWeave high-performance computing contract. This deal, which is an extension of the original 16MW hosting agreement based in Austin, TX, has a 12-year term and is projected to generate cumulative revenue of $3.5 billion.
H.C. Wainwright's revision of the price target is influenced by a broader understanding of the synergies between high-performance computing and bitcoin mining at the data center level, rather than the specifics of the CoreWeave contract itself. The firm believes that Core Scientific's scale, diversity of locations, and extensive experience in developing high-tier data centers position it as a solid operator in the industry.
The raised price target to $11.00 from $5.00 underscores the firm's confidence in Core Scientific's operational capabilities and its strategic expansion initiatives. This move also reflects the market's growing recognition of the value inherent in the combined operation of high-performance computing alongside cryptocurrency mining activities.
Core Scientific's stock outlook is bolstered by the company's recent developments and the positive assessment from H.C. Wainwright, indicating a potential upside for investors as the company continues to execute its growth strategy.
In other recent news, Core Scientific has expanded its hosting deal with CoreWeave, resulting in an anticipated additional $1.225 billion in cumulative revenue over the contract's duration. This supplements the over $3.5 billion in revenue projected from prior agreements with CoreWeave. The company also plans to modify 100 MW of its infrastructure to provide about 70 MW for CoreWeave's NVIDIA (NASDAQ:NVDA) GPU-powered HPC operations.
In addition, Core Scientific's CEO, Adam Sullivan, has secured a new employment agreement, which includes a base salary of $625,000 and an annual incentive target of 125% of the base salary, contingent upon performance criteria.
Compass Point has raised its price target for Core Scientific's shares to $12.50, following the 200MW AI/HPC hosting agreement with CoreWeave. BTIG has upgraded Core Scientific from a Neutral to a Buy rating due to its consistent operational performance.
Furthermore, Core Scientific has announced a 72-megawatt capacity expansion at its Denton, Texas data center, expected to be completed by 2024. The company reported record bitcoin earnings in March 2024, mining 906 bitcoins and facilitating the earning of an estimated 309 bitcoins for its customers.
These are some of the recent developments in the operations of Core Scientific.
InvestingPro Insights
Following the upbeat assessment from H.C. Wainwright, Core Scientific Inc. (NASDAQ: CORZ) shows a compelling financial narrative through InvestingPro's lens. The company currently boasts a high shareholder yield, a metric that suggests a commitment to generating value for investors. Analysts, noting the company's momentum, have revised their earnings expectations upward for the upcoming period, signaling confidence in Core Scientific's financial trajectory.
InvestingPro data reveals a substantial market capitalization of $1.55 billion USD, underlining the company's significant presence in the market. Despite a high P/E ratio of 70.31, which reflects investor optimism about future earnings potential, the company's revenue growth for the last quarter was an impressive 48.6%. This growth is a testament to Core Scientific's operational success and aligns with the positive outlook provided by H.C. Wainwright.
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