Core Scientific Inc Stock Drops 16.67% Amidst Analyst Forecasts

Core Scientific Inc (CORZ) stock fell 16.67% on Jul 7 to $15.00, down from its previous close of $18.00. Trading volume was 76.5 million shares, 507.4% above the average daily volume. Analysts forecast an average price target of $18.09, implying a 20.59% upside from the current price. The average brokerage recommendation is 1.7, indicating "Outperform" status.

CoreWeave Inc (NASDAQ:CRWV) has announced an all-stock acquisition of Core Scientific Inc (NASDAQ:CORZ) worth approximately $9 billion, based on CORZ's price of $20.40 per share on July 3, 2025. The deal, expected to close in late 2025 after receiving necessary approvals, will see CORZ shareholders owning less than 10% of the combined entity. This acquisition follows Core Scientific's pivot from Bitcoin mining to high-performance computing (HPC) and AI hosting, and its subsequent restructuring after surviving Chapter 11 bankruptcy.

CoreWeave's Strategic Gain

CoreWeave stands to gain significant assets and potential revenue streams from the acquisition. Core Scientific's portfolio includes nine data center sites, with two under development, and 1.2 GW of contracted power. CoreWeave will also assume Core Scientific's debt, which amounts to $1.119 billion, but will eliminate over $10 billion in future lease overheads. This move allows CoreWeave to consolidate or exit real estate tied to data centers, potentially shifting workloads to new assets and reducing lease overheads.

CoreWeave's Overleveraging Concerns

Despite the strategic benefits, the acquisition raises concerns about CoreWeave's already high debt levels. As of Q1 2025, CoreWeave had a total debt of $17.2 billion and reported a net loss of around $300 million. The company's revenue backlog of $25.9 billion, comprising $14.7 billion in Remaining Performance Obligations (RPO) and a $11.2 billion strategic partnership with OpenAI, indicates significant future commitments. However, the company has only deployed 420 MW of computing power against its total 1.6 GW of contracted power.

AI Market Potential

CoreWeave's leadership believes that the AI market offers ample room for growth, despite the crypto sector's volatility. The company's CEO, Michael Intrator, has stated that the acquisition accelerates its strategy to deploy AI and HPC workloads at scale. CoreWeave's access to Nvidia's cutting-edge technology, such as Blackwell Ultra, and its $981.6 million revenue in Q1 2025, an increase of 420% year-over-year, support this view.

Investor Implications

Investors should consider several factors when evaluating the impact of this acquisition. The deal's success will depend on CoreWeave's ability to integrate Core Scientific's assets and reduce its debt burden. Additionally, the AI market's growth potential and CoreWeave's competitive position will be crucial determinants of the combined entity's success.

References

[1] https://www.investing.com/analysis/what-coreweaves-9b-core-scientific-deal-means-for-its-stock-price-200663278
[2] https://www.marketbeat.com/stocks/NASDAQ/CORZ/forecast/