Core Scientific (CORZ) Skyrockets as AI Buyout Rumors Fuel $30 Price Target

The intersection of Bitcoin (BTC) mining and Artificial Intelligence (AI) is creating explosive trading opportunities, exemplified by Core Scientific's (CORZ) recent market performance. Following a report from The Wall Street Journal that cloud compute provider CoreWeave is in advanced talks to acquire the Bitcoin miner, CORZ shares surged an astonishing 33% to close above $16 on Thursday. However, analysts at Cantor Fitzgerald believe the market is still significantly undervaluing the company. In a late Thursday research note, the firm posited that a potential acquisition could value Core Scientific at over $30 per share, suggesting a further upside of nearly 100% from its current levels. This bullish outlook stems from a renewed bid by CoreWeave, which had a previous offer of $5.75 per share rejected in 2024, highlighting a dramatic shift in valuation as the AI infrastructure boom accelerates.

Deconstructing the Bull Case: A $3.5 Billion AI Contract

The foundation of Cantor Fitzgerald's optimistic valuation is a landmark 12-year, $3.5 billion infrastructure agreement signed between Core Scientific and CoreWeave. This deal tasks Core Scientific with providing 200 megawatts (MW) of power capacity specifically for AI workloads. The stability of this long-term cash flow is a game-changer for a company traditionally reliant on the volatile BTC price, which recently saw a 1.5% dip in its USDT pair. Cantor values this lease stream alone at $24 per share, applying a conservative 15x profit multiple typical for data center REITs. On top of that, the firm adds another $11.70 per share for the replacement value of Core Scientific’s extensive 570MW of existing power infrastructure. This detailed breakdown provides a clear, data-driven pathway to the $30+ valuation, shifting the narrative for CORZ from a pure-play crypto miner to a high-demand AI infrastructure provider.

The Great Pivot: Why BTC Miners are Becoming AI Powerhouses

This strategic pivot is not unique to Core Scientific. A May report from fintech and AI research firm Rittenhouse Research argued that the most forward-thinking crypto companies are leveraging their core assets for AI. The report noted that "the infrastructure used to mine digital gold is better used to process AI algorithms," pointing to Galaxy Digital's 2022 acquisition of the Helios data center as a prescient move into AI infrastructure. The rationale is compelling: AI offers stable, long-term revenue streams, insulating companies from the quadrennial BTC halving events that slash mining rewards and the inherent volatility of the crypto markets. As investor Kevin O'Leary stated in a recent interview, the race for AI supremacy is fundamentally about power. Bitcoin miners, having already built out mega-wattage facilities near sustainable energy sources, are serendipitously positioned to meet this demand. O'Leary emphasized that institutional investors are now keenly focused on this overlap, seeking to capitalize on the synergy. The recent profit squeeze post-halving has only accelerated this trend, with firms like Hive Digital (HIVE) and Hut 8 (HUT) also dedicating significant data center capacity to AI.

Navigating the Risks: Not All AI Pivots Succeed

However, traders must recognize that this strategic shift is not a guaranteed path to success. The market's reaction to different approaches has been varied. While Core Scientific enjoys a massive rally, Bit Digital (BTBT) saw its stock fall 15% during Thursday's session after announcing it was selling its Bitcoin rigs to focus on Ethereum staking. Similarly, hardware manufacturer Canaan (CAN), which once had aspirations in the AI chip market, has shuttered that division and seen its stock plummet nearly 75% over the last six months, closing at just 63 cents on Thursday. These examples serve as a crucial reminder that execution and strategy are paramount. Core Scientific's apparent success lies in its hybrid approach—leveraging its existing mining footprint to secure a massive, long-term AI contract rather than abandoning its core competency entirely. As O'Leary noted, the competition is global, and securing power is a geopolitical issue. With states like Texas, North Dakota, and even Canadian provinces like Alberta offering low-cost energy, North American miners hold a strategic advantage in the burgeoning "AI Wars," making stocks like CORZ a focal point for traders watching this evolving narrative.