CORZ - Is Core Scientific stock a 'buy' after $1 billion bid from CoreWeave?

2024-06-04 19:39:09 ET

Core Scientific Inc (NASDAQ: CORZ) is up 40% on Tuesday following a report that CoreWeave wants to take over the Bitcoin miner for just over $1.0 billion.

Core Scientific stock could climb another 20%

It has only been months since the company based out of Austin, Texas pulled out of bankruptcy.

Still, Gregory Lewis – a BTIG analyst continues to see further upside in that has well over doubled already since its year-to-date low in early February. His $8.0 price target on Core Scientific stock suggests another 20% upside from here.

Lewis expects strength in Bitcoin to clear the path for the Nasdaq-listed firm to lower its debt moving forward. Consistent operational execution was among other reasons he cited for his bullish view on Core Scientific shares.

Last month, said it mined about $175 million worth of Bitcoin in its fiscal Q1 . The crypto mining company swung to a profit of $210.7 million in its recently reported quarter as well. At the time, Adam Sullivan – its chief executive said:

We earned more bitcoin than any other publicly traded miner, strengthening our balance sheet by paying down debt and improving our cash position, and our fleet efficiency with deployment of new-gen miners.

Core Scientific stock up on AI deal with CoreWeave

CoreWeave also inked a 200 megawatts AI deal with Core Scientific on Tuesday.

It reportedly agreed to injecting about $300 million in the form of capital investments in the Bitcoin mining company with option to eventually expand that commitment as well. Representatives of both and CoreWeave, however, have refrained from commenting on the said news so far.

The BTIG analyst is bullish on Core Scientific stock as he’s convinced the Austin-headquartered firm will continue to reduce the debt on its balance sheet moving forward.

Note that generated just under $180 million of revenue in its latest reported quarter – up significantly from just $121 million a year ago. Gregory Lewis wrote in a note to clients last week:

We’re bullish on Core Scientific shares under a backdrop of a firm BTC price, ongoing deleveraging, and opportunities for their existing power capacity to be deployed in non-crypto data centres.

Core Scientific stock does not, however, pay a dividend at writing. So, that part of its story is not particularly exciting at the moment.

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