Last Update 19 Feb 26

CORZ: Power Shift To High Performance Compute Will Support Future Contracts

Analysts have lifted their $-denominated price targets on Core Scientific, with one firm increasing its view by $6. They point to steadier discount rate assumptions, slightly higher projected revenue growth and margins, and a lower future P/E multiple supported by expectations for additional high performance compute contracts after the failed CoreWeave merger.

Analyst Commentary

Bullish analysts are leaning into a more constructive view on Core Scientific, pointing to both valuation reset and execution potential around high performance compute contracts after the terminated CoreWeave deal.

Bullish Takeaways

The recent US$6 price target increase reflects more confidence in the company’s revenue and margin outlook, as well as a P/E framework that builds in additional high performance compute contracts over time.
Some bullish analysts have shifted their rating stance following the merger rejection, arguing that the share price already reflects prior weakness and that the current setup offers upside if management can execute on new high performance compute opportunities.
High performance compute is viewed as a key growth vector, with expectations that Core Scientific will secure more colocation contracts, which bullish analysts see as an important support for future earnings power.
Even as policy updates around crypto and market structure introduce uncertainty for digital asset names generally, bullish analysts emphasize Core Scientific’s efforts to convert part of its power infrastructure toward high performance compute workloads as a potential offset.

What's in the News

Bitcoin mining companies including Core Scientific are retooling data centers toward artificial intelligence workloads, with AI customers described as a new source of deep pocketed demand as traditional bitcoin mining business conditions have cooled (Wall Street Journal).
U.S. regulators are preparing to outline new rules for crypto, which could affect listed miners and related infrastructure providers such as Core Scientific, depending on how the final framework treats digital asset activities (Wall Street Journal).
The White House plans to meet with banks and crypto firms, a step that could influence how policymakers think about companies like Core Scientific that sit at the intersection of digital assets and large scale computing (Reuters).
Japan’s financial watchdog intends to require crypto exchanges to hold reserves against liabilities, and Core Scientific is listed among publicly traded companies in the broader crypto and digital asset ecosystem that investors often track around such policy discussions (Nikkei).

Valuation Changes

Fair Value: Stays unchanged at $37.43, suggesting no adjustment to the model’s central value estimate.
Discount Rate: Eases slightly from 9.03% to 8.99%, indicating a modest reduction in the assumed risk profile.
Revenue Growth: Edges up from 71.15% to 71.76%, reflecting a small increase in expected top line expansion.
Net Profit Margin: Moves from 24.86% to 25.13%, pointing to a slightly stronger earnings efficiency assumption.
Future P/E: Steps down from 42.29x to 39.74x, implying a lower valuation multiple applied to projected earnings.

5 views

Key Takeaways

Core Scientific leverages low-risk, capital-light contracts and first-mover advantages to achieve outsized margins and rapid, recurring revenue growth in AI datacenter markets.
Strategic power partnerships and a hybrid business model ensure persistent cost advantages, sustainability, and diversified earnings from both digital asset and compute market expansion.
Heavy reliance on a single customer and ongoing transition risks expose the company to earnings volatility, overcapacity, and operational challenges amid evolving regulatory and market dynamics.

Catalysts

About Core Scientific

Provides digital asset mining services in the United States.What are the underlying business or industry changes driving this perspective?

Analysts broadly agree the CoreWeave contract will drive substantial revenue, but this view likely understates its impact: with CoreWeave funding nearly all CapEx, Core Scientific faces exceptionally low risk and could scale EBITDA and free cash flow far beyond datacenter industry norms due to minimal capital needs and stable, take-or-pay fixed payments across a 12-year term.
Analyst consensus expects gradual customer diversification to reduce revenue concentration, but the accelerating pipeline of hyperscale and large enterprise deals-several already approaching 50-100 megawatts-suggests Core Scientific could rapidly outpace projections, creating recurring, higher-margin revenue streams that materially lift gross and net margins well ahead of schedule.
The ongoing, industry-wide shift toward power-intensive AI workloads, combined with Core Scientific's first-mover advantage and purpose-built, high-density data centers, positions the company to dominate this exponentially growing segment-driving long-term topline growth and enabling premium pricing versus legacy operators.
Core Scientific's long-standing partnerships with utilities and proactive expansion into regions with abundant renewable energy provide strategic access to lower-cost, greener power, resulting in persistent cost advantages, margin expansion, and resilience against regulatory and supply chain shocks.
Amid accelerating institutional adoption of Bitcoin, rising network difficulty favors scale players; Core Scientific's hybrid model enables it to both capitalize on hosting demand and expand self-mining, magnifying future earnings growth and ensuring diversified upside as both digital asset and compute markets mature.

Core Scientific Earnings and Revenue Growth

Core Scientific Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more optimistic perspective on Core Scientific compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
The bullish analysts are assuming Core Scientific's revenue will grow by 72.6% annually over the next 3 years.
The bullish analysts assume that profit margins will increase from -170.8% today to 35.8% in 3 years time.
The bullish analysts expect earnings to reach $641.5 million (and earnings per share of $1.38) by about September 2028, up from $-595.2 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 17.4x on those 2028 earnings, up from -7.5x today. This future PE is lower than the current PE for the US Software industry at 36.2x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.17%, as per the Simply Wall St company report.

Core Scientific Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

High concentration of revenue with CoreWeave, the company's foundational customer, means that any downturn or contractual change with CoreWeave-such as non-renewal, payment disputes, or shifts in demand-could significantly affect both revenue stability and earnings.
The company's legacy bitcoin mining business continues to account for a portion of its financial exposure, and ongoing declines in bitcoin production and revenues associated with the transition to datacenter colocation could introduce earnings volatility and affect profitability during the multi-year transition.
Aggressive growth plans into high-density AI colocation are subject to potential overcapacity or rapid changes in AI infrastructure trends, increasing the risk that sustained customer demand does not materialize as forecasted, which could suppress future revenue and result in underutilized assets.
Capital intensity and the need for ongoing site and technology upgrades create long-term risks around maintaining operational efficiency and competitive cost structures; any underinvestment due to liquidity constraints or rising costs could cause declining net margins relative to better-capitalized competitors.
Potential regulatory and sustainability pressures around datacenter energy usage-especially with new environmental legislation or electricity price shocks-could increase operating expenses or slow project approvals, negatively impacting margins and constraining revenue growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bullish price target for Core Scientific is $23.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Core Scientific's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $23.0, and the most bearish reporting a price target of just $15.0.
In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $1.8 billion, earnings will come to $641.5 million, and it would be trading on a PE ratio of 17.4x, assuming you use a discount rate of 9.2%.
Given the current share price of $14.53, the bullish analyst price target of $23.0 is 36.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Core Scientific?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Bitcoin Adoption And Renewable Power Will Transform Data Centers