Core Scientific Inc. Receives Hold Rating Amid Acquisition Uncertainty and Financial Miss

Core Scientific Inc reported a Q2'25 financial miss due to lower computing margins and increased expenses. The ongoing acquisition by Coreweave introduces uncertainty, and the lack of earnings call clarity adds to the ambiguity. Analyst John Todaro maintains a cautious Hold rating, awaiting more information on the acquisition's impact on the company's financial trajectory. TR | OpenAI also reiterated a Hold rating with a $14.50 price target.

Core Scientific Inc (NASDAQ: CORZ) reported a disappointing fiscal second quarter of 2025, with revenue declining by 47% compared to the same period last year. The company's digital asset self-mining revenue dropped significantly, while colocation revenue showed growth. The quarter was marked by increased expenses and a substantial net loss, largely attributed to non-cash fair value adjustments. The pending acquisition by CoreWeave adds to the uncertainty surrounding the company's financial trajectory.

Financial Performance

Total revenue for the second quarter of 2025 was $78.6 million, down from $141.1 million in Q2'24. Digital asset self-mining revenue, the primary revenue driver, fell to $62.4 million from $110.7 million in the prior year, driven by a 62% decrease in bitcoin mined, partially offset by a 50% increase in the average bitcoin price. Colocation revenue, which includes high-density compute services, grew to $10.6 million from $5.5 million in Q2'24, as the company expanded operations into Denton, Texas.

Gross profit for the quarter was $5.0 million, a significant decrease from $38.8 million in Q2'24. The company reported a net loss of $936.8 million, compared to $804.9 million in the prior year, primarily due to non-cash fair value adjustments of $910.0 million. Adjusted EBITDA was $21.5 million, down from $46.0 million in Q2'24.

Acquisition by CoreWeave

The company announced a pending acquisition by CoreWeave, subject to stockholder and regulatory approvals. The transaction, if completed, will result in Core Scientific's shares being converted into CoreWeave shares at a ratio of 0.1235. Analyst John Todaro maintains a cautious Hold rating, awaiting more information on the acquisition's impact. TR | OpenAI also reiterated a Hold rating with a $14.50 price target.

Outlook and Challenges

Core Scientific faces several challenges, including the integration of the CoreWeave acquisition, potential regulatory hurdles, and the uncertain impact of the acquisition on its financial trajectory. The company's ability to maintain its competitive position and attract customers for its high-density colocation capabilities will be critical in the coming quarters.

References

[1] https://www.stocktitan.net/news/CORZ/core-scientific-announces-fiscal-second-quarter-2025-rdz7ppfk9bqg.html