Investment bank Macquarie upgraded Core Scientific (CORZ) to outperform from neutral and raised its price target on the stock almost 90% to $34 from $18 following the collapse of the CoreWeave (CRWV) deal.
The failed merger between Core Scientific and CoreWeave was not a surprise after reports and proxy recommendations pointed to shareholder opposition, analysts Paul Golding and Marni Lysaght wrote in Thursday’s report.
Analysts at the bank viewed the outcome as positive, as it gave Core Scientific more flexibility to lease its short-term power capacity to AI tenants.
Core Scientific shares rose 4.5% in early trading, around $21.70.
Analysts noted that the bitcoin miner’s 1.5 gigawatt (GW) portfolio includes 590 megawatts (MW) leased to CoreWeave and another 1 GW gross, approximately 700 billable MW, under load study.
Management expects to sign at least one new colocation client by fourth-quarter earnings, a move Macquarie said could accelerate revenue diversification and highlight the company’s advantage in developing high-performance computing.
Jefferies said Core Scientific is moving forward with renewed focus after shareholders rejected its proposed merger with CoreWeave.
The bank noted that Core Scientific emerges from the process with 1.5 GW of existing and planned billable power capacity and little capex tied to the now-defunct deal.
Throughout the merger talks, the miner continued to expand its data center business and is now positioned to sign new tenants and power contracts by the end of the year, analysts led by Jonathan Petersen wrote in Thursday’s report.
Signing a new tenant would be a key milestone in diversifying revenue and reducing reliance on CoreWeave, the report said.
Jefferies has a Buy rating on Core Scientific shares with a $28 price target.
Read more: Core Scientific holders prepared to reject CoreWeave merger, Jefferies says
