Core Scientific Analyst Emphasizes 'Access To Power' In Bitcoin Mining Assets - Deal With CoreWeave Under Focus

Cantor Fitzgerald analyst Brett Knoblauch initiated coverage on Core Scientific, Inc. CORZ, with a price forecast of $20.

According to the analyst, Bitcoin miners currently have one of the most coveted assets in the world – access to power.

In June 2024, Core Scientific announced a deal with CoreWeave (private), following which shares went up meaningfully.

With CoreWeave, Core Scientific was the first Bitcoin miner to sign a meaningful AI/HPC deal.

In what has now been extended, CoreWeave will lease 270 MW from Core Scientific for 12 years, and pay the company a total of $4.725 billion over that duration, amounting to ~$1.45 million per MW.

Also Read: Block and Core Scientific Enter Supply Agreement for Mining ASICs

What is most differentiated about this deal that other miners will not be able to replicate is the fact that CoreWeave will fund the entire capex buildout itself (~$1.3 billion).

Per the analyst, this is effectively an interest-free loan for CoreWeave, which can use the annuity like revenue stream to fund additional capacity expansion, and to potentially lever up the business to maximize equity returns.

Core Scientific has earmarked an additional 322 MW for AI/HPC, which could generate an additional $335 million in annual revenue and $268 million in annual profits.

Long term – the analyst sees the potential for shares to be multiples higher than the current price target.

Price Action: CORZ shares are trading lower by 5.17% to $11.10 at last check Wednesday.

Image via Shutterstock

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