Bernstein Remains Optimistic Amid Market Turbulence
In a recent report, Bernstein expressed strong confidence in Core Scientific (CORZ), even as the company’s stock experienced a significant decline of 30% earlier this week. This drop followed challenges posed by Chinese artificial intelligence (AI) startup DeepSeek, which questioned the valuation of Bitcoin (BTC) miners as data center operators.
A Silver Lining: Stock Valuation at a Discount
Despite the recent downturn, Bernstein highlighted that Core Scientific’s stock is now trading at a substantial discount. This presents a potential buying opportunity for investors looking to capitalize on the company’s growth prospects in the burgeoning AI and cryptocurrency sectors.
Core Scientific: Leading the AI-Focused Mining Frontier
According to Bernstein, Core Scientific is positioned as the “leader of the pack” among AI-oriented bitcoin miners. The company boasts an impressive 1.3 gigawatts (GW) of available power supply and has secured a 12-year AI partnership with CoreWeave, enhancing its operational capabilities in this emerging field.
The analysts, led by Gautam Chhugani, noted that bitcoin miners have a limited 12 to 18-month window to establish a hybrid data center business model, especially as capital expenditures (capex) from hyperscalers remain stable. This timeframe underscores the urgency for miners to innovate and adapt.
Progress on Data Center Development
Bernstein also reported that Core Scientific is on track to launch its first cluster of data centers in the first half of the year. The company is actively pursuing the acquisition and development of new power sites, further solidifying its position in the market.
Current Stock Valuation and Future Outlook
Interestingly, Core Scientific’s stock is currently valued more like traditional bitcoin mining firms rather than data center companies, despite the fact that 70% of its capacity is dedicated to AI operations. Bernstein maintains an outperform rating on Core Scientific’s shares, setting a price target of $17.
In early trading, the stock showed signs of recovery, climbing 3.8% to reach $11.90. This rebound suggests that investors are beginning to recognize the underlying value of Core Scientific amidst the volatility.
In conclusion, as the cryptocurrency and AI landscapes continue to evolve, Core Scientific stands out as a promising player with a strategic vision for the future. Investors may find the current market conditions an opportune moment to engage with this innovative company.
