Investment bank Macquarie upgraded Core Scientific (CORZ) to outperform from neutral and raised its price target on the stock by almost 90%, from $18 to $34, following the failure of the CoreWeave (CRWV) deal.
The failure of the merger between Core Scientific and CoreWeave comes as no surprise after reports and proxy recommendations highlighted shareholder opposition, analysts Paul Golding and Marni Lysaght wrote in the report Thursday.
The bank’s analysts viewed the outcome as positive, giving Core Scientific more flexibility to lease its power capacity in the short term to AI tenants.
Shares of Core Scientific were up 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 from CoreWeave and an additional 1 GW gross, or approximately 700 billable MW, under load study.
Management expects to sign on at least one new colocation customer by fourth-quarter results, a move that Macquarie says could accelerate revenue diversification and highlight the company’s advantage in developing high-performance computing.
Jefferies said Core Scientific was moving forward with a renewed focus after shareholders voted against its proposed merger with CoreWeave.
The bank noted that Core Scientific left the process with 1.5 GW of existing and planned billable power capacity and little capital expenditure related to the now-defunct deal.
Throughout the merger negotiations, the miner continued to grow its data center business and is now on track 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 step toward diversifying revenue and reducing reliance on CoreWeave, the report said.
Jefferies has a Buy rating on Core Scientific shares with a $28 price target.
Learn more: Major scientific holders ready to reject CoreWeave merger, says Jefferies
