Core Scientific (CORZ) has positioned itself as a potential leader in hosting high-performance computing (HPC) through strategic partnerships and strong management expertise. Recently, the company secured significant deals with CoreWeave, enhancing its market position.
Broker B Riley has upgraded Core Scientific to a buy rating from neutral, citing the promising outlook. The price target for the company’s shares has been raised to $13, reflecting the confidence in its growth potential. Despite a slight decline in share price at $11.53, Core Scientific’s long-term prospects are seen as favorable.
B Riley’s analysis values the existing agreements of Core Scientific, excluding the Austin contract, at a total of $2.3 billion for 270 megawatts (MW) of capacity. This valuation does not consider potential extension options for these contracts. The increasing importance of economies of scope in the digital mining industry, with approximately 1.23 million bitcoins left to be mined, highlights the significant market opportunity.
Core Scientific’s partnership with CoreWeave is a step towards achieving economies of scope, with CoreWeave funding all capital costs related to HPC upgrades. This innovative agreement structure showcases Core Scientific’s forward-thinking approach and strategic vision in the rapidly evolving digital mining landscape.
The industry’s current valuation of around $80 billion, excluding transaction fees, underscores the immense growth potential for companies operating in the HPC and digital mining sectors. Core Scientific’s proactive stance in securing valuable partnerships positions it well for future success and solidifies its reputation as a key player in the high-performance computing hosting market.