Core Scientific's Stock Soars 260% Post-Bankruptcy as Company Shifts Focus to AI and High-Performance Computing

Core Scientific Inc. (CORZ) is one of the biggest Bitcoin mining companies out there. They’re gearing up to remember 2024 as a key year. The company came out of Chapter 11 bankruptcy in January and got their shares back on Wall Street. Since then, their stock has jumped nearly 260%. That’s impressive!

What fueled this comeback? A rise in Bitcoin’s price. It had dropped to $16,000 when the company declared bankruptcy in December 2022. Now, Core Scientific is focusing on high-performance computing (HPC). This shift helps them meet the growing demand for data centers, especially for artificial intelligence applications.

In a recent chat with Benzinga, CEO Adam Sullivan shared insights about their strategy. He pointed out the challenges the industry faces, especially after the April halving event. This event cut block rewards, which are crucial for mining revenue, by 50%. Sullivan explained that their strategy post-halving targets hash price, local power costs, and environmental factors. This approach has helped them maximize performance and profitability.

“We conducted extensive scenario analysis to understand the impact of different hash price assumptions on our business,” Sullivan stated. Over the past 18 months, they’ve developed their HPC strategy. They identified a balance between supply and demand in the high-power data center market. Unlike the unpredictable Bitcoin mining business, Sullivan sees the AI sector as a “predictable, long-term, and profitable revenue stream.”

In June, Core Scientific entered a 12-year contract with CoreWeave, a cloud provider backed by Nvidia. This deal will provide infrastructure for AI applications. Sullivan expects this partnership to bring in $6.7 billion in revenue. That positions Core Scientific as one of the largest publicly traded data center companies in the U.S.

Support for Bitcoin mining is also coming from Donald Trump, the Republican presidential candidate. He wants all remaining Bitcoins to be mined in the U.S. Sullivan welcomes support from all levels of government. “We believe that Bitcoin and artificial intelligence are strategic technologies that the United States must support and nurture,” he said.

Sullivan also discussed a significant deal where Core Scientific purchased mining chips from Jack Dorsey’s company Block Inc. (SQ). This marks a shift away from reliance on the Chinese leader in the market, Bitmain. “We believe the new Block ASIC chips will enhance our mining economics,” Sullivan explained. He added that this deal showcases the potential of domestic chipmakers. Strong government backing will pave the way for future success.

These developments will be further explored at the upcoming Benzinga Future of Digital Assets event on November 19.

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