Core Scientific (CORZ) Shares Surge 3.54% on Strategic Shift to AI Colocation Services

Core Scientific (CORZ) shares surged 3.54% intraday on October 6, 2025, reaching their highest level since October 2025, with a 0.51% closing gain. The rally reflects renewed investor confidence in the company’s strategic repositioning amid a broader shift in market dynamics.

The stock’s performance aligns with Core Scientific’s transition from digital asset mining to high-performance computing (HPC) colocation services. This pivot positions the company as a key infrastructure provider for AI and advanced computing workloads. In Q1 2025, it reported plans to deliver 250MW of billable capacity to CoreWeave by year-end 2025, with colocation revenue projected to hit $360 million annually in 2026. The move reduces reliance on volatile cryptocurrency markets and taps into growing demand for AI infrastructure.

However, the partnership with CoreWeave remains a double-edged sword. While the firm delivered 8MW of capacity to CoreWeave in Q1 2025, with an additional 40MW expected by quarter-end, the $9 billion acquisition faces regulatory and shareholder scrutiny. Delays or rejections could disrupt execution timelines and erode investor sentiment, highlighting the need for swift approvals to maintain momentum.

Financial results underscore both potential and challenges. A $580.7 million net income in Q1 2025—driven by a $621.5 million non-cash warrant gain—contrast sharply with a negative $(6.1) million Adjusted EBITDA. This reflects ongoing struggles to transition from declining digital asset mining revenue (down 75% due to Bitcoin halving) to colocation services. Analysts estimate a fair value of $19.95 per share, suggesting an 11% undervaluation, though a 15.7x price-to-sales ratio exceeds industry averages, signaling valuation risks.

Market sentiment remains mixed. While a 31% recent stock surge indicates optimism, analysts emphasize execution risks, including operational delays and over-reliance on CoreWeave. The competitive colocation landscape further complicates growth prospects, with differentiation through scalable infrastructure and strategic partnerships deemed critical. Investors must balance AI-driven demand potential against unprofitable core operations and regulatory uncertainties.