Jefferies Boosts Core Scientific with Buy Rating Amid AI Demand Surge

Jefferies Initiates Coverage of Core Scientific with Positive Outlook

According to CoinDesk, financial services firm Jefferies has recently initiated its coverage of bitcoin miner Core Scientific (CORZ), offering a positive view with a buy rating and a price target set at $19. This strategic move comes on the heels of a notable increase in demand for mining operations, particularly related to artificial intelligence (AI).

Core Scientific's Strategic Positioning

Jefferies highlighted Core Scientific's unique positioning to leverage the rising demand from AI companies. The mining operations of Core Scientific are not just profitable but are becoming increasingly efficient, as noted in the recent report by Jefferies.

Financial Performance and Market Reaction

The bank’s research report, released on Monday, prompted early trading activity that saw shares of Core Scientific rise by 1.7%, reaching a value of $13.60.

Supporting AI Demand

According to analysts Jonathan Petersen and Jan Aygul, major tech companies are expected to closely monitor the developments at CoreWeave, a key player in the AI sector. A successful execution of strategies and operations could encourage tech leaders to pursue future development leases with Core Scientific.

Landmark AI Contract

One of the significant achievements for Core Scientific was the landmark 12-year AI contract signed in June with hyperscaler CoreWeave. This contract represents a major milestone in the burgeoning relationship between bitcoin mining and AI technology.

Looking Ahead: Diversification and New Deals

Looking forward, Jefferies anticipates that Core Scientific will expand its tenant base to include other hyperscalers, with management predicting additional leasing announcements by the end of the year. Although upcoming AI deals may not reach the same economic advantages as the CoreWeave lease, Jefferies still considers them to represent a strong opportunity for Core Scientific.

Conclusion

As the intersection between bitcoin mining and artificial intelligence continues to evolve, Core Scientific is poised to play a crucial role in meeting the industry's growing needs. With Jefferies' endorsement and the company's solid operational framework, the future looks promising for both the firm and its investors.