Last Update 05 Feb 26

Fair value Decreased 0.74%

CORZ: Power Footprint Conversion To High Performance Compute Will Drive Next Phase

Analysts have trimmed their fair value estimate for Core Scientific from US$37.71 to US$37.43, citing updated assumptions around discount rates, revenue growth, margins and future P/E after recent price target changes and research highlighting both regulatory risks for crypto and potential long term upside from high performance computing contracts.

Analyst Commentary

Recent Street research around Core Scientific has highlighted a mix of crypto related policy risk and optimism around the company’s push into high performance computing, with some research pointing to potential valuation upside if execution on new contracts goes to plan.

One research desk raised its price target by US$6 and another upgraded the stock to a Buy rating with a US$23 price target after shareholders rejected the proposed merger with CoreWeave. This research framed Core Scientific as a pure play on the transition of power infrastructure toward high performance compute. At the same time, separate commentary flagged that delays in U.S. market structure legislation are a headwind for crypto exposed business models, which remains an important consideration for Core Scientific’s risk profile.

Bullish Takeaways

Bullish analysts cite the US$6 price target increase as support for the view that current pricing does not fully reflect potential earnings from high performance computing contracts once they ramp.
The upgrade to a Buy rating with a US$23 price target is framed around Core Scientific’s position as a power infrastructure owner that can convert capacity from crypto mining to higher value colocation. These analysts see this as a key driver for future cash flow.
Research highlighting expectations that the company could secure additional high performance computing colocation contracts from 2026 underpins a more constructive view on revenue visibility and execution on the new business mix.
Bullish analysts describe Core Scientific as having lagged peers that have signed similar conversion contracts. In their view this leaves room for sentiment to improve if management delivers on the high performance computing build out and contract pipeline.

What's in the News

Core Scientific was cited alongside other bitcoin miners that have shifted parts of their data center capacity toward artificial intelligence workloads. The report said this offers access to deep pocketed customers at a time when bitcoin mining economics have cooled, with the CoinShares Bitcoin Mining ETF reported as up 90% this year (Wall Street Journal).
Core Scientific was identified on CNBC as the data center provider facing delays in Texas, Oklahoma and North Carolina. CoreWeave's CEO said these delays contributed to missed full year guidance at CoreWeave, and both companies' stocks were reported to have dropped on the day of the interview (CNBC).
Japan's financial watchdog plans to require crypto exchanges to hold reserves against liabilities to help protect customers if an exchange is hacked or suffers other losses. Core Scientific was mentioned among publicly traded companies in the broader crypto related group that investors may track alongside this policy discussion (Nikkei).
U.S. regulators were reported as preparing to lay out new crypto rules, signaling further clarity ahead for companies operating in or adjacent to digital assets, a category that includes Core Scientific (Wall Street Journal).
The White House was reported as planning a meeting with banks and crypto firms, pointing to ongoing policy focus on digital assets that could influence sentiment around crypto exposed businesses such as Core Scientific (Reuters).

Valuation Changes

The fair value estimate has fallen slightly from US$37.71 to US$37.43 per share.
The discount rate has edged down from 9.08% to 9.03%, reflecting a modest adjustment in the assumed cost of capital.
The revenue growth assumption has risen slightly from 70.27% to 71.15%, indicating a small increase in modeled top line expansion.
The net profit margin assumption has increased from 24.46% to 24.86%, a minor uplift in expected profitability on future revenues.
The future P/E multiple has been reduced from 44.02x to 42.29x, pointing to a lower valuation multiple applied to projected earnings.

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.

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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.

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