Updated Aug 7 at 11:18am ET.
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In a recent interview, President Trump claimed that members of Congress are looking to pass regulations that could effectively shut down the AI industry. This matters for Core Scientific because its entire long-term plan relies on building data centers to host AI workloads.
If new laws make it harder or more expensive for AI companies to operate, it could slow down the demand for the specialized power and space that Core Scientific provides. While these comments are high-level political warnings rather than specific new laws, they highlight a growing debate over how much the government should control the technology that is currently driving the company's growth.
Source: Reuters
Analysts at KBW upgraded the stock to their version of a buy rating. This move follows a quarter where the company showed it can successfully land massive contracts to host AI hardware for other firms.
The upgrade suggests growing confidence that the company is successfully shifting its business model. By moving from mining Bitcoin to providing the power and space for AI data centers, it is turning its electrical infrastructure into a more predictable and valuable source of cash.
Canaccord Genuity raised its price target from $30 to $36. The change comes after the company revealed a massive new deal to provide data center capacity for AI systems.
This higher target reflects the scale of the new contract, which could bring in billions of dollars in revenue over the next fifteen years. It shows analysts believe the company's power assets are becoming more valuable as AI firms scramble for space in specialized data centers.
Source: Canaccord Genuity
The company appointed Mark Adams to its board of directors, expanding the group to seven members. Adams has spent over thirty years in the technology industry, specifically in areas like AI infrastructure and chips. This addition brings relevant technical expertise as the company pivots toward high-performance computing. Having a director who understands the hardware and power needs of AI firms helps as the company tries to sign more long-term hosting deals.
Source: 8-K filing
The company reported revenue of about 164 million dollars, which was higher than the 140 million analysts expected. While it reported a large net loss, the focus was on a massive new partnership with AMD. This deal could eventually support up to 2.5 gigawatts of power capacity and potentially generate over 14 billion dollars in revenue over 15 years.
The business is rapidly shifting from mining Bitcoin to hosting AI workloads for other companies. Revenue from this hosting business, called colocation, jumped to nearly 137 million dollars this quarter. This is the core of the company's plan: using its existing power lines and data center space to serve the AI boom, which offers more stable and predictable income than the volatile Bitcoin market.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Analysts recently issued a flurry of upgrades and price target increases following the company's strong earnings report and new partnership with AMD. Nearly all analysts rate the stock a buy, with an average target price suggesting 67% upside.
The company has missed analyst profit targets for several quarters, largely because it is spending heavily to build out new data centers. Revenue is growing fast, but the path to steady profits remains choppy.
| Expectation | |
|---|---|
| EPS | $-0.01 |
| Revenue | $196M |
Seeking Alpha · Opinion · Aug 4
Business Wire · Press release · Jul 29
Seeking Alpha · Opinion · Jul 28
Barrons · Jul 28
Reuters · Jul 28
Business Wire · Press release · Jul 28
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