The shares of Core Scientific (NASDAQ:CORZ) stock, a Bitcoin (BTC-USD) miner that also provides some hosting service, are popping over 30% in early trading. The firm is getting the boost because it announced that it had signed a series of 12-year deals likely to be worth over $3.5 billion with CoreWeave, an artificial intelligence (AI) hyperscaler.
Important Information About Core Scientific’s Deals
Under the agreements, Core Scientific will host CoreWeave’s high-performance computing operations, including its AI chips made by Nvidia (NASDAQ:NVDA). Core Scientific expects the deals to generate revenue of over $3.5 billion and predicts that it will be ready to provide the hosting services for CoreWeave in the first half of 2025.
Core Scientific will generate about 200 megawatts of electricity to power CoreWeave’s operations.
Core Scientific’s Longer Term Goals
The company says that the deals with CoreWeave leave it well-positioned to produce additional revenue from providing hosting services to other AI players. CoreScientific adds that entering the AI space while continuing to mine Bitcoin will boost its cash flow and reduce its risk.
The firm reported that the demand for high-power AI hosting sites is outpacing the supply of such facilities. It noted that it is already in talks with other firms about hosting their high-performance computing operations.
Core Scientific has nearly 500 megawatts of power that it can devote to such endeavors.
Not Entirely New Territory for Core Scientific and CORZ Stock
The company previously provided hosting services to CoreWeave between 2019 and 2022, and the two companies signed a new hosting deal in March.
Pressured by rising energy costs and low crypto prices, Core Scientific declared bankruptcy in December 2022 and exited bankruptcy early this year.
Heading into today, the shares had risen 44% over the last month, while they had gained 34% in the last three three months.
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On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
