Core Scientific Detonates As CoreWeave Realizes It Can Save Billions By Buying the Landlord…

Core Scientific is coming off the kind of day that makes short sellers consider a new career. After a Wall Street Journal report leaked that CoreWeave is back in buyout talks, Core Scientific went absolutely feral… soaring 33% and clinching it’s second-biggest rally since the company crawled out of bankruptcy and back onto the Nasdaq, still smelling faintly of Chapter 11 and Monster energy drinks. 

(Source: Giphy) 

Keep in mind, CoreWeave tried to buy Core Scientific last year for less than the cost of a mediocre Bored Ape NFT. And yet, surprisingly, that offer didn’t just get rejected… it got yeeted out of the room. Now, after a full pivot from “please, Bitcoin, go up” to “sure, we’ll host your AI cluster orgies, Core Scientific is suddenly worth $5 billion. 

(Source: CNBC) 

And to CoreWeave, which is basically the world’s most expensive Nvidia rental service who slings GPUs to anyone with a cloud budget and a God complex, it’s the move. Why? Well because they’re currently on the hook for $10.2 billion in payments to Core Scientific over the next 12 years. $850 million a year, just for the privilege of not having to build their own server farm in rural Texas. At some point, you stop paying rent and just buy the f*cking building… and that’s precisely what CoreWeave is doing. 

(Source: TipRanks) 

For this reason, analysts are now tossing out price targets as if Core Scientific invented electricity. Cantor says $30 a share, Roth MKM says maybe $38 if CoreWeave feels extra zesty. That’s up to five times what CoreWeave tried to pay last year. But again, this is what happens when you transform from mining bitcoin and praying the lights stay on to AI landlord for hire. Translation: The market stops treating you like a meme stock and starts pretending you’re a real company.

However, with that said, most of these bitcoin mines like Core Scientific were built for one thing: melting GPUs and dodging subpoenas. Meaning, supporting AI workloads isn’t just moving the racks and hoping for the best. Instead, you need real infrastructure. And if CoreWeave thinks they can just slap some Nvidia logos on the wall and call it a cloud, someone needs to make them touch grass. 

(Source: Giphy) 

But, but, but… again, Wall Street is doing backflips to justify the price. One analyst says “it makes a lot of sense”, while another says “CoreWeave could save several billions of dollars”, to which they aren’t wrong. But they have to know what they’re getting into. Meanwhile, Core Sceintific’s management is getting the most action they’ve had in years… especially if this deal closes anywhere near the rumored numbers. 

In the end, the main motivation of this whole shindig is this: CoreWeave gets to stop bleeding rent, Core Scientific gets an exit after circling the drain the past few years, and Wall Street gets another excuse to pretend that pivoting from crypto to AI is anything other than a rebrand for the terminally online. As for investors, there’s clearly something in the water as Core Scientific is up 39.81% over the past five days. Meaning, keep your eyes on this story and place your bets accordingly. Once the deal finalizes… expect fireworks. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.