Crypto miner Core Scientific Inc (NASDAQ:CORZ) has recently caught the attention of analysts at BTIG, who have raised their price target for the company to $15 from $10. This increase is based on new data center contracts and the overall growth potential in the Bitcoin mining sector. The BTIG BTC mining basket, which consists of 14 companies, has shown an aggregate hash rate of about 138 EH, representing 23% of the global hash rate. The hash rate is expected to grow to 153 EH by 2025, driven by new rigs that improve fleet efficiency.
As of now, Bitcoin’s price is hovering around $62,000, which is up 45% year-to-date. This rise in price has led to miners benefiting from higher margins. The global hash rate, which averaged 582 EH in June, has seen some fluctuations but is up 57% from last year. Network difficulty has also steadily increased, rising 60% over the past year and 16% year-to-date.
Core Scientific’s Recent Developments
Core Scientific recently announced a 200MW high-performance computing (HPC) contract with CoreWeave, along with an additional 70MW of data center contracts. These new developments have resulted in Core Scientific’s stock surging by almost 90% in recent weeks. BTIG has pointed out that the shift to fixed-price multi-year contracts has allowed some miners, like CORZ, to decouple from Bitcoin prices. This has been evident with other miners as well, with Terawulf up over 100% and Iris up around 70% over a certain period.
The race for power access has intensified among publicly listed BTC miners due to the increasing demand from data center companies. For every 100MW of power converted or powered-up for HPC, there is 5-6 EH less for the global hash rate. During site visits to Riot’s Corsicana facility and Core Scientific’s Denton facility, BTIG observed that the industrialization of BTC mining has indeed arrived. Riot’s Corsicana facility is projected to reach 31 EH by the end of this year and 41 EH by 2025.
BTIG’s report shed light on Bitdeer’s investor discussions, highlighting a focus on designing mining rigs and converting existing facilities for HPC computing. The company’s Washington facility, located near a Microsoft data center, has potential conversions in Ohio and Norway. BTIG estimates the value of Core Scientific’s 286MW of fixed HPC contracts at $9-$10 per share, assuming a 15x EBITDA multiple. With a target of 500MW for HPC by 2028, BTIG expects an additional $5 per share value, justifying the new price target of $15.
The future looks bright for Core Scientific Inc (NASDAQ:CORZ) and the overall Bitcoin mining sector as a whole. With new developments, growth potential, and strategic planning in place, the company is well-positioned to capitalize on the evolving landscape of cryptocurrency mining.