Why Core Scientific (CORZ) is a High-Conviction Buy Amidst Takeover Uncertainty and HPC Growth Potential

In the volatile world of high-performance computing (HPC) and AI infrastructure, Core Scientific (NASDAQ: CORZ) has emerged as a compelling case study in strategic risk/reward dynamics. The recent termination of its proposed $9.0 billion merger with CoreWeave, coupled with a surge in analyst optimism and intrinsic value recalculations, has created a unique inflection point for investors. This article dissects why CORZ remains a high-conviction buy, even as it navigates the uncertainty of standalone operations and the explosive growth of the HPC market.

The Merger Exit: A Catalyst for Standalone Value Unlocking

The collapse of the CoreWeave deal in October 2025, due to insufficient shareholder approval, initially appeared as a setback. However, this outcome has inadvertently positioned Core Scientific to capitalize on its standalone strengths. According to results, the company's robust power pipeline-1.3 GW of gross power with 1 GW of expansion potential-offers a more direct path to value creation than a merged entity.

Citizens, Macquarie, and Cantor Fitzgerald have all upgraded CORZ to "Outperform" or "Buy" ratings, with price targets ranging from $26.82 to $30.00 per share. These upgrades reflect a recalibration of expectations: instead of relying on a merger-driven narrative, Core Scientific is now being valued for its ability to monetize its power infrastructure independently. The intrinsic value of the company, estimated at $19.55 per share under a base-case scenario, suggests a 31% undervaluation relative to its current price of $13.57. This gap widens when considering the company's strategic pivot to high-density colocation, which generated a 45% year-over-year revenue increase in Q3 2025.

HPC Market Dynamics: A Tailwind for Long-Term Growth

The HPC market is on a trajectory to grow from $54.2 billion in 2025 to $87.31 billion by 2030, driven by AI/ML workloads and GPU-accelerated computing. Core Scientific's focus on HPC infrastructure aligns it with this megatrend. Analysts at Roth Capital highlight that the company's power portfolio is uniquely positioned to serve Tier-1 cloud providers and U.S. federal labs, which are expected to dominate AI/ML training demand.

Moreover, the AI data center market-a subset of HPC-is projected to expand at a staggering 31.6% CAGR, reaching $933.76 billion by 2030. Core Scientific's existing colocation footprints and power infrastructure provide a scalable foundation to capture this growth. The rejection of the CoreWeave merger eliminates integration risks while preserving the company's agility to pursue partnerships or organic expansion in this high-margin segment.

Intrinsic Value Reassessment: From $27.65 to $26.82

Post-merger, the consensus intrinsic value for CORZ was $27.65 per share. After the deal's termination, this figure has been adjusted to $26.82, a modest 3% reduction that underscores the market's confidence in the company's standalone potential. This recalibration is supported by improved EBITDA margins in the HDC segment and the elimination of $10 billion in future lease overhead that the merger would have otherwise incurred.

While Q3 2025 adjusted EBITDA was negative at $2.4 million-a sharp decline from $10.1 million in the prior year-the shift to HDC services is expected to stabilize cash flows by 2026. Analysts from Clear Street and Cantor Fitzgerald argue that the company's power pipeline alone could justify a $30.00 price target, assuming 70% utilization of its expansion capacity.

Risk/Reward Analysis: Balancing Execution Risks and Market Potential

Critics of CORZ point to execution risks, including capital intensity and competition from hyperscalers like Microsoft and Amazon. However, these challenges are mitigated by the company's strategic focus on high-margin HPC infrastructure and its ability to leverage AI-driven demand. The intrinsic value gap-$13.57 market price vs. $26.82 estimated fair value-implies a 98% upside potential, a reward that comfortably offsets the risks for long-term investors.

Furthermore, the termination of the CoreWeave merger removes the uncertainty of integration costs and operational complexity. Core Scientific can now allocate capital to optimize its power infrastructure and expand its colocation footprint without diluting shareholder value through a stock-based acquisition.

Conclusion: A High-Conviction Buy in a High-Growth Sector

Core Scientific's journey from a Bitcoin miner to a HPC infrastructure leader is far from complete, but the recent analyst upgrades, intrinsic value recalculations, and HPC market tailwinds make it a compelling high-conviction buy. The rejection of the CoreWeave merger, while initially disruptive, has unlocked a clearer path to value creation. With a $26.82 intrinsic value floor and a $30.00 price target ceiling, the risk/reward asymmetry is heavily skewed in favor of investors who recognize the company's strategic positioning in the AI/ML era.

As the HPC market accelerates and Core Scientific's power pipeline reaches full capacity, the stock's potential to double from current levels is not just plausible-it is increasingly probable.