Jefferies Initiates Buy Rating for Core Scientific Amid AI Demand Surge

According to CoinDesk, Jefferies has initiated coverage of bitcoin miner Core Scientific with a buy rating and a $19 price target. The financial institution highlighted the company's unique positioning to capitalize on the increasing demand from artificial intelligence (AI) companies. Core Scientific's mining operations are noted to be profitable and increasingly efficient, according to the report. Jefferies emphasized that Core Scientific (CORZ) is well-positioned to capture the growing AI demand due to its substantial power supply and robust data center development team. The bank's research report, released on Monday, initiated coverage of the bitcoin miner with a buy rating and a $19 price target. Early trading saw the shares rise by 1.7% to $13.60. Analysts Jonathan Petersen and Jan Aygul noted that major tech companies are likely to monitor CoreWeave's developments closely. Successful execution could persuade decision-makers to sign future development leases with Core Scientific. In June, Core Scientific signed a landmark 12-year AI contract with hyperscaler CoreWeave, marking a significant milestone for the industry. Jefferies expects Core Scientific to diversify its tenant base to include other hyperscalers, with management anticipating further announcements by the end of the year. While future AI deals may not be as economically favorable as the CoreWeave lease, they are still expected to be highly beneficial, according to Jefferies. The report also mentioned that Core Scientific's bitcoin mining operations remain profitable and are becoming more efficient. Although a significant expansion of the company's bitcoin mining business is not anticipated, it is expected that Core Scientific will maintain a stable number of ASIC miners and continue to update its fleet over time.