The landscape for Bitcoin (BTC) mining stocks is undergoing a seismic shift, and Core Scientific (CORZ) is at the epicenter. The company's stock experienced a dramatic surge, jumping 33% to close above $16 on Thursday following a report from The Wall Street Journal that AI cloud computing firm CoreWeave is in advanced talks for an acquisition. This news has electrified the market, but according to investment bank Cantor Fitzgerald, the current valuation may still significantly underestimate the company's true potential. The firm issued a research note suggesting CORZ could be worth over $30 per share in a buyout, representing a potential doubling from its recent highs. This bullish outlook isn't just speculation; it's rooted in a strategic pivot that could redefine profitability for the entire crypto mining sector.

The $3.5 Billion AI Pivot: Valuing CORZ Beyond Bitcoin

The core of Cantor Fitzgerald's bullish thesis lies in Core Scientific's strategic move into the artificial intelligence infrastructure space. In 2024, CORZ signed a monumental 12-year, $3.5 billion contract to provide 200 megawatts (MW) of high-performance computing (HPC) capacity to CoreWeave. This deal provides a stable, long-term revenue stream, a stark contrast to the volatile and cyclical nature of Bitcoin mining. Cantor's analysts have broken down their valuation meticulously. They assign a value of $24 per share to this AI lease stream alone, using a conservative 15x profit multiple that is standard for traditional data center REITs. On top of that, they add another $11.70 per share for the replacement value of Core Scientific's remaining 570MW of power infrastructure. This combined valuation points to a significant disconnect between the current market price and the underlying asset value, presenting a compelling case for traders and investors.

From Digital Gold to AI Algorithms

This strategic pivot aligns with a broader industry trend identified by fintech and AI-focused firm Rittenhouse Research. In a May report, the firm argued that the most forward-thinking crypto companies are leveraging their existing infrastructure for AI rather than simply expanding their BTC mining operations. The argument is compelling: the vast energy and computational resources built for mining are perfectly suited for powering AI models, which generate more predictable, long-term cash flows. Unlike Bitcoin mining revenue, which is subject to the price volatility of BTC—currently trading around $107,553 on the BTC/USDC pair—and the quadrennial shock of the halving, AI contracts offer stability. Rittenhouse highlights Galaxy Digital's 2022 acquisition of the Helios data center as a prime example of this foresight, transforming a struggling mining asset into a strategic AI powerhouse as demand for LLMs surged.

A High-Stakes Bet: Not All Pivots Are Created Equal

While the market is rewarding Core Scientific's potential AI pivot, traders must recognize that this strategic shift is fraught with risk, and success is not guaranteed. The path away from pure-play Bitcoin mining is littered with cautionary tales. For instance, Bit Digital's announcement that it was dumping its Bitcoin rigs to focus on Ethereum staking was met with skepticism, causing its stock to fall by 15% during Thursday's trading session. Similarly, hardware manufacturer Canaan attempted to diversify into AI chips but was forced to shutter the unit after failing to gain market traction, leading to a nearly 75% collapse in its stock price over the last six months. These examples underscore the execution risk involved. Core Scientific's advantage, however, is that it is not abandoning mining entirely but rather leveraging its existing footprint to tap into the booming AI infrastructure market. This hybrid model could offer a blueprint for other miners, allowing them to de-risk their reliance on BTC's price cycles while capturing upside from the AI revolution. If CoreWeave's second offer materializes and reflects Cantor's valuation, it could trigger a wave of consolidation and strategic re-evaluation across the entire mining sector, creating significant opportunities for discerning investors.