December 4, 2024

(AN UPDATE ON CORE SCIENTIFIC (CORZ)

December 4, 2024

Hello everyone

December 4, 2024, stock price: $16.42

August 7, 2024, purchase price: $9.71

Percentage gain from 08/07/24 to 11/29/24 = 84.14%

Core Scientific (CORZ) daily chart

Core Scientific is a sort of rags to riches story. This year it went from bankruptcy to an investor’s favourite by betting on two big technology trends: AI data centres and bitcoin mining. Shares are up around 400% this year.

Core Scientific has been earning steady profits by hosting servers owned by companies that sell cloud services to AI providers.

Data centres are in high demand because tech companies need them to power their AI applications.

Core Scientific operates nine grid-connected warehouses in six states with access to so much electricity they could serve several hundred thousand homes.

The company started the year focused entirely on crypto mining, but it quickly pivoted as it saw demand surge for electricity for AI data centres.

In June, the company signed a deal with a company called Coreweave to lease data centre space for AI cloud services. Coreweave has since agreed to lease 500 megawatts worth of space. Core Scientific says it will get paid $8.7 billion over 12 years under the deal.

Privately held Coreweave is one of the fastest-growing companies behind the AI revolution. It was once a cryptocurrency miner, but has since transitioned to offering cloud services, with a particular focus on artificial intelligence. It’s closely connected to Nvidia, which has invested money in Coreweave and given the company access to its top-end chips. Coreweave expects to be one of the first customers for Nvidia’s upcoming Blackwell GPUs.

Analysts see EPS in the company jumping tenfold by 2027. Shares trade at about 13 times those 2027 estimates.

The data center opportunity should only grow from here, as tech companies build more powerful AI systems. Of the 1,200 megawatts worth of gross power capacity Core Scientific has contracted, about 800 megawatts are going to data center computing deals and 400 megawatts toward Bitcoin mining.

QI CORNER

Recording of October Zoom monthly Meeting (apologies for the late arrival of this recording)

https://www.madhedgefundtrader.com/jacquie-munro-meeting-replay-october-2024/

Cheers

Jacquie

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