Macquarie has upgraded Core Scientific (CORZ) to outperform from neutral and raised its price target on the stock significantly, nearly 90%, to $34 from $18 after the CoreWeave (CRWV) deal fell through.
The collapse of the merger between Core Scientific and CoreWeave was anticipated, as reports and proxy recommendations indicated shareholder resistance, according to analysts Paul Golding and Marni Lysaght in their Thursday report.
The analysts interpreted the situation positively, suggesting it gives Core Scientific more ability to lease its near-term power capacity to AI clients.
In early trading, Core Scientific shares climbed 4.5%, reaching about $21.70.
The bitcoin miner’s 1.5 gigawatt (GW) portfolio comprises 590 megawatts (MW) already leased to CoreWeave and an additional gross capacity of 1 GW, with approximately 700 MW billable, under load study.
Management anticipates signing at least one new colocation client by the fourth quarter, a strategy Macquarie noted could enhance revenue diversification and showcase the company’s strengths in high-performance computing developments.
Jefferies remarked that Core Scientific is progressing with a sharpened focus following shareholders’ rejection of the CoreWeave merger proposal.
The bank emphasized that Core Scientific emerges from the merger discussions with 1.5 GW of existing and planned billable power capacity and minimal capital expenditures linked to the scrapped deal.
Throughout the merger negotiations, the miner expanded its data center operations, positioning itself to engage new tenants and power contracts by year-end, as noted by analysts led by Jonathan Petersen in the Thursday report.
Securing a new tenant would represent a significant step towards revenue diversification and diminishing reliance on CoreWeave, the report highlighted.
Jefferies holds a buy rating on Core Scientific shares with a price target of $28.
Read more: Core Scientific Holders Poised to Reject CoreWeave Merger, Jefferies Says
