- CoreWeave’s acquisition of Core Scientific unlocks capacity for HPC/AI workloads.
- The company may become aggressive in acquiring other bitcoin miners.
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As the demand for high-performance computing and artificial intelligence continues to surge, the recent acquisition of Core Scientific Inc. CORZ by CoreWeave Inc. CRWV signals a significant shift in the tech landscape. This move not only expands CoreWeave’s capacity to meet growing market needs but also raises questions about the overall value of its stock amid rising operational costs.
CoreWeave’s announced acquisition of Core Scientific is a strategic fit and would unlock an estimated 150-200MW of additional IT capacity for HPC (high-performance computing) and AI (artificial intelligence) workloads, according to Needham.
The CoreWeave Analyst: Analyst Mike Cikos downgraded the rating from Buy to Hold.
The CoreWeave Thesis: The additional sites are likely to incur significantly higher capital expenditures than the existing retrofits, Cikos said in the downgrade note.
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"CRWV has no interest in expanding into mining and if certain power is not suitable for HPC/AI, CRWV would look to divest it," he wrote.
The acquisition allows CoreWeave to own high-quality underlying infrastructure and save $500 million in operating expenses annually, the analyst stated.
While Core Scientific makes "the most sense," CoreWeave could aggressively acquire other bitcoin miners, Cikos said.
Accounting for the all-stock purchase of Core Scientific, the valuation of CoreWeave's stock seems full, which warrants the downgrade, he added.
CRWV Price Action: Shares of CoreWeave had declined by 3.8% to $147.11 at the time of publication on Thursday.
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