Citizens JMP Initiates Core Scientific with an Outperform

On May 22, a Citizens JMP analyst initiated coverage of Core Scientific Inc. (NASDAQ:CORZ) with an Outperform rating and a price target of $15.

The analyst based his optimistic outlook on Core Scientific’s existing infrastructure of low-cost and high-density mining facilities, which he believes could be leveraged to provide capacity for data centers. This will open many opportunities for the company beyond its digital asset mining and hosting businesses, which currently earn the company the majority of its revenues.

In the analyst’s bullish scenario, the company could unlock substantial long-term value if Core Scientific successfully capitalizes on this transition to leasing data center capacity. According to his estimates, its high-performance computing (HPC) hosting business could be valued at $48 per share in the long term.

To provide context, the HPC business accounted for around 5% of total revenue in 2024 but was non-existent before that. Until April 2024, the company operated only the digital asset self-mining and digital asset hosted mining businesses, and started the strategic transition to HPC hosting services in mid-2024. This is why the company already has a large fleet of specialized computers (miners in cryptocurrency terms), which the Citizens JMP analyst is focusing on. While most of this capacity is leased to CoreWeave Inc. (NASDAQ:CRWV), the company is well-positioned to serve the broader HPC market.

Notably, Citizens JMP has become more constructive on the broader bitcoin power space. The firm recently initiated coverage on CoreWeave with a similarly optimistic thesis. (Please refer to our coverage on that initiation here.)

With this transition, Core Scientific is evolving into a large-scale digital infrastructure provider for high-performance computing. The company operates dedicated, purpose-built facilities and provides digital infrastructure, software solutions, and services to its third-party customers.

While we acknowledge the potential of CORZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CORZ and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.