- Core Scientific secured 2.5 gigawatts of data center capacity in a strategic partnership with AMDAMD-- to support AI deployments.
- The company reported a 109% year-over-year revenue increase in Q2 2026, driven by its transition from cryptocurrency mining to high-density colocation.
- Wall Street analysts upgraded Core ScientificCORZ-- to Buy, citing accelerated AI infrastructure pivot execution and a massive contracted revenue pipeline.
Investors weighed near-term execution costs and potential dilution from AMD warrants against the long-term value of contracted demand.
Core Scientific Inc. (NASDAQ: CORZ) announced a strategic partnership with Advanced Micro DevicesAMD-- (AMD) to secure up to 2.5 gigawatts of data center capacity for the deployment of artificial intelligence solutions . The agreement, which includes collaboration on physical infrastructure design, provides AMD with access to 500 megawatts of U.S. infrastructure beginning in 2027, with an option to scale to the full capacity. As part of the commercial terms, AMD will receive market-priced warrants to buy Core Scientific shares, aligning the hardware sales with long-term infrastructure access amid intensifying competition for power and land . This move positions Core Scientific alongside peers like Hut 8 and IREN, who have also signed multibillion-dollar AI infrastructure agreements to monetize existing power infrastructure .
The partnership aligns with Core Scientific's second-quarter 2026 financial results, which highlighted a significant transformation of its business model . Revenue surged 109% year-over-year to $164.2 million, with colocation revenue jumping to $136.7 million from $10.6 million in the prior-year quarter . This represents the majority of total revenue as the company transitions its operations from BitcoinBTC-- mining to hosting AI and high-performance computing workloads . The company reported a net loss of $3.32 per share, primarily driven by a $1.05 billion change in the fair value of warrants reflecting stock price appreciation . Despite the reported loss, adjusted EBITDA rose to $41.1 million, and the company increased its total leased customer power capacity to approximately 1.1 gigawatts .
Why Is Core Scientific Transitioning to AI Infrastructure?
Core Scientific is accelerating its retreat from Bitcoin mining toward AI infrastructure, paying $41.9 million to terminate a mining contract with Block and its Proto unit. This decision supports the company's transition to high-density colocation operations, reallocating power from mining equipment to data-center capacity for GPUs . The terminated agreement would have supplied 15 exahashes per second of computing power, but Core Scientific now plans to extract cash from its remaining fleet while converting facilities . Self-mining revenue fell 66% to $21.5 million, while colocation revenue accounted for 83% of total revenue, up from 13% a year earlier .
The broader Bitcoin mining industry is undergoing a similar transformation, with over $70 billion in AI contracts collectively signed by public mining companies. These firms are leveraging existing massive power infrastructure that AI companies desperately need, though the sector faces a near-term funding gap of approximately $50 billion . Converting mining facilities to AI-ready data centers requires substantial investment in cooling, networking, and redundancy standards . Core Scientific's capital expenditures totaled $797.5 million in the second quarter, reflecting heavy investment in data center infrastructure to support this transition .
What Is the Market Reaction to the AMD Deal?
Wall Street analysts raised price targets for Core Scientific, viewing the AMD partnership as validation of its AI strategy and a large quality lease. Needham raised its price target to $35 from $29, maintaining a Buy rating, while Canaccord lifted its target to $36 from $30, also with a Buy rating . Freedom Capital Markets upgraded Core Scientific to Buy from Hold, citing its rapid execution in transitioning to AI infrastructure and a major 530-megawatt deal with AMD . The firm set a $33 price target and increased revenue estimates for upcoming quarters, noting the company is ahead of schedule on delivering power for a CoreWeave contract .
Despite the positive strategic announcement, Core Scientific shares reversed early gains to fall more than 4% during trading . This reversal reflects investor caution regarding near-term execution costs, power availability, and the capital required to convert former mining sites into AI-ready facilities . The stock declined over 12% in the past week, though it remains up over 40% since the start of 2026 as the market assesses the company's transition . A key concern for investors is the commercial terms of the deal, which were not fully disclosed, including expected revenue, construction spending, or a timetable for bringing the full 2.5 gigawatts online .
Core Scientific is billing for 437 megawatts of capacity as of mid-July, representing approximately $635 million in average annualized colocation revenue . The company increased total leased customer power capacity to approximately 1.1 gigawatts, representing more than $24 billion of potential contracted revenue . The AMD deal adds more than $14 billion of potential base contracted revenue, anchored by 15-year agreements for approximately 530 megawatts across five sites . Core Scientific continues to hold approximately 848 Bitcoin on its balance sheet, valued at around $53.8 million, while focusing on scaling its AI infrastructure capabilities .
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