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Invezz 2025-01-31 07:35:52

This Bitcoin miner is down 25% after DeepSeek selloff, but analyst sees rebound ahead

DeepSeek’s artificial intelligence announcement triggered a sizable sell-off in bitcoin miners this week. One of the hardest hit among them was Core Scientific Inc. In just the last five days, the Core Scientific stock has slumped down around 25%. The stock currently trades at around $12. But the Chinese startup driven decline in Core Scientific stock may be overblown, according to Bernstein analyst Gautam Chhugani. Down more than 30% versus its high in late November, shares of the Austin headquartered miner trading at a deep discount at writing, which warrants an investment for significant potential returns in 2025, he told clients in a research note today. Core Scientific stock could return to $17 Bernstein recommends loading up on Core Scientific stock on the weakness as it could climb back to the $17 level by the end of 2025. Analyst Chhugani called the Nasdaq listed firm a leader in hybrid miners or companies that have an active bitcoin mining as well as an artificial intelligence business. CORZ has a first-mover advantage over its rivals with a $6.7 billion deal with Nvidia-backed CoreWeave in 2024, he added. Our top pick, CORZ offers ready power access and data centre buildout to HPC cloud partners such as CoreWeave, who in turn are contracted by hyperscalers and AI labs. Core Scientific shares do not currently pay a dividend though. CORZ is being valued as pure-play bitcoin miner Core Scientific is currently trading at an enterprise value of about $2.7 million per megawatt – more like a pure-play bitcoin miner than a hybrid. The company based out of Austin, Texas has about 70% of its capacity allocated to AI. Still, data centres don’t seem to be baked into its valuation at writing, Chhugani argued in his report. Bitcoin miners are the second derivative of the AI capex story. They have a 12-18 months finite window to build a hybrid data centre business, while the hyperscalers capex remains persistent. Versus its 52-week low, Core Scientific stock is up a whopping 350% at writing. How Core Scientific did in its latest reported quarter Analyst Gautam Chhugani remains super bullish on Core Scientific stock even though the company’s third-quarter financial results in November were not all that encouraging. CORZ saw its revenue tank 16% on a year-over-year basis to $95 million as its loss also widened to $455 million in Q3. At the time, chief executive Adam Sullivan told investors: Based on our existing pipeline and growing list of potential new clients, we now have line of sight to a total of more than one gigawatt of critical IT load to contract, significantly expanding the value we can create for our shareholders. Note that Bernstein is not the only one among Wall Street firms to take a bullish stance on bitcoin miners following the DeepSeek driven decline. Analysts at Cantor Fitzgerald and Piper Sandler also called the sell-off overdone in their research notes this week. The post This Bitcoin miner is down 25% after DeepSeek selloff, but analyst sees rebound ahead appeared first on Invezz

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