AUSTIN, Texas - Core Scientific, Inc. (NASDAQ: CORZ), a key player in bitcoin mining and high-performance computing (HPC) infrastructure, has announced a significant expansion of its HPC hosting capabilities through a new contract with CoreWeave.
The agreement, which follows an initial 200 megawatt (MW) contract signed on June 3, 2024, will see Core Scientific modify its sites to provide an additional 112 MW to host CoreWeave's NVIDIA (NASDAQ:NVDA) GPUs.
The modifications are slated to begin in the latter half of 2024, with the sites expected to become operational in the first half of 2026. This 12-year agreement is projected to contribute $2.0 billion to Core Scientific's cumulative revenue, raising the total potential revenue from CoreWeave contracts to over $6.7 billion.
Core Scientific's CEO, Adam Sullivan, stated that the deal reflects the strong market demand for high-power data center infrastructure and the company's capacity to meet these needs. Sullivan also highlighted the company's ongoing efforts to identify new sites for expansion beyond the original 500 MW target.
The contract with CoreWeave includes two renewal options, each extending for five years. CoreWeave has one remaining option for an additional 118 MW of infrastructure. If exercised, this would further cement Core Scientific's position as one of the largest publicly traded data center operators in the United States.
The expansion aligns with Core Scientific's strategy to develop application-specific data centers that cater to the high energy density requirements of modern HPC workloads. The company's total contracted power now stands at 1.2 gigawatts, enabling it to offer nearly 500 MW of infrastructure for HPC hosting.
Core Scientific operates eight data centers across the United States and primarily generates revenue through bitcoin mining and hosting services for third-party customers. The information in this article is based on a press release statement.
In other recent news, Core Scientific reported mining 411 bitcoins in July, generating approximately $25.2 million in sales proceeds. The company also announced strategic plans to integrate Block's new 3 nanometer ASIC chip next year, and a 100 MW expansion project at its Pecos, Texas data center. Core Scientific secured high-performance computing hosting contracts totaling 270 megawatts, projected to generate over $4.7 billion in revenue over the next 12 years.
The company also expanded its hosting agreement with CoreWeave, expecting to generate an additional $1.225 billion in cumulative revenue. CEO Adam Sullivan secured a new employment agreement, and the company solidified its executive team with a new employment agreement for its Chief Legal and Administrative Officer, Todd M. DuChene.
Analysts from Cantor Fitzgerald and H.C. Wainwright have given Core Scientific an Overweight and Buy rating respectively, reflecting confidence in the company's strategic moves. These recent developments indicate a busy and productive period for Core Scientific, as it continues to make significant strides in the digital infrastructure and bitcoin mining industry.
InvestingPro Insights
As Core Scientific, Inc. (NASDAQ: CORZ) announces its ambitious expansion in high-performance computing infrastructure, investors may be evaluating the company's financial health and market position. A glimpse into the real-time data from InvestingPro reveals several key metrics that are particularly relevant given the context of Core Scientific's recent contract announcement.
InvestingPro Data shows that Core Scientific has a market capitalization of $1.46 billion, indicating a substantial presence in its industry. Despite a recent downturn in stock performance, with a 10.85% decrease in the price total return over the last week and a 20.12% drop over the past month, the company has demonstrated a remarkable 139.65% return over the last three months, which could be indicative of strong market confidence in its long-term strategy and growth potential.
The company's revenue growth for the last quarter was an impressive 48.6%, showcasing a significant increase that aligns with its operational expansion plans. However, the overall revenue growth for the last twelve months has slightly declined by 1.3%, underscoring the importance of new contracts like the one with CoreWeave to bolster future revenue streams.
InvestingPro Tips suggest that Core Scientific's stock generally trades with high price volatility, which could be a factor for investors who prioritize stability. Nevertheless, analysts predict the company will be profitable this year, aligning with the expectation of net income growth. This forward-looking optimism is a crucial factor for potential investors considering the company's future earnings prospects.
For those interested in deeper analysis, InvestingPro offers additional tips on Core Scientific, which include insights on shareholder yield, EBIT valuation multiples, and long-term profitability. There are currently 12 additional InvestingPro Tips available for Core Scientific at https://www.investing.com/pro/CORZ, providing a comprehensive outlook for investors seeking to make informed decisions.
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