Investment bank Macquarie upgraded Core Scientific ( CORZ ) to outperform from neutral and raised its price target on the stock by nearly 90% to $34 from $18 following the collapse of the CoreWeave ( CRWV ) deal.
The failed merger between Core Scientific and CoreWeave came as no surprise after reports and proxy recommendations pointed to opposition from shareholders, analysts Paul Golding and Marni Lysaght wrote in the report Thursday.
The bank’s analysts viewed the result as a positive, giving Core Scientific more flexibility to lease its power capacity in the short term to AI tenants.
Core Scientific shares were 4.5% higher in early trading, around $21.70.
The analysts noted that the bitcoin miner’s 1.5 gigawatt (GW) portfolio includes 590 megawatts (MW) leased to CoreWeave and another 1 GW gross, about 700 MW billable, under load study.
Management expects to sign at least one new colocation customer by fourth-quarter earnings, a move Macquarie said could accelerate revenue diversification and highlight the company’s strengths in high-performance computing builds.
Jefferies said Core Scientific is moving forward with renewed focus after shareholders voted down its proposed merger with CoreWeave.
The bank noted that Core Scientific exits the process with 1.5 GW of existing and planned billable power capacity and few capital expenditures tied to the now-defunct deal.
During the merger talks, the miner continued to expand its data center business and is now positioned to sign new tenants and power contracts before the end of the year, analysts led by Jonathan Petersen wrote in the Thursday report.
The signing of a new tenant would be an important milestone to diversify revenue and reduce dependence on CoreWeave, the report said.
Jefferies has a buy rating on Core Scientific stock with a price target of $28.
Read more: Scientific core holders poised to reject CoreWeave merger, Jefferies says
