What's Happening?
Roth Capital Partners has upgraded Core Scientific's shares from neutral to buy, raising the 12-month price target from $17 to $23.50, indicating a potential 32% gain. This upgrade follows CoreWeave's
decision not to increase its acquisition offer for Core Scientific, reducing the likelihood of a deal. Core Scientific, a major digital infrastructure owner, operates data centers across six U.S. states with a total power capacity of 1.3GW. The company is now expected to focus on leasing its power capacity for high-performance computing applications, such as AI workloads and bitcoin mining.
Why It's Important?
The upgrade by Roth Capital suggests confidence in Core Scientific's standalone business model, particularly in the high-performance computing sector. The decision by CoreWeave not to pursue the acquisition further highlights the competitive nature of the digital infrastructure market. Core Scientific's ability to lease its power capacity could attract significant business from companies needing robust computing resources, potentially increasing its market value and investor interest.
What's Next?
Core Scientific will likely continue to explore opportunities to lease its power capacity to other tenants, focusing on high-performance computing applications. Investors and market analysts will be watching for any new partnerships or contracts that could enhance Core Scientific's market position. The company's performance in the coming months will be crucial in determining whether the upgraded price target is achievable.
