Bitcoin miner Core Scientific, which has been pursuing artificial intelligence (AI) deals, is now trading at a 'deep discount' after the recent DeepSeek scare. Bernstein analyst Gautam Chhugani believes this presents a buying opportunity, citing Core's partnership with AI startup CoreWeave and its first-mover advantage in the 'hybrid' bitcoin mining space. While other analysts see the DeepSeek-driven sell-off as an overreaction, H.C. Wainwright holds a contrarian view, predicting that pure-play bitcoin miners will outperform hybrid miners like Core Scientific in the near term.
Bitcoin miners were among the hardest hit during the DeepSeek scare earlier this week, and one of Bernstein's favorite names is now available at a 'deep discount.' Core Scientific, a leading bitcoin miner pursuing artificial intelligence deals, lost approximately 30% in the sell-off. It's currently 42% below Bernstein's $17 price target for the stock.
Analyst Gautam Chhugani stated in a note on Thursday, 'Our top pick, CORZ offers ready 'power access' and data center buildout to HPC cloud partners such as CoreWeave, who in turn are contracted by hyperscalers and AI labs.' 'Bitcoin miners are the second derivative of the AI capex story,' he added. 'We are inclined to believe bitcoin miners have a 12-18 month finite window to build a hybrid data center business, while the hyperscaler capex remains persistent,' he further stated. 'CORZ is the leader of the pack.' Core Scientific is trading at a 'deep discount' following the DeepSeek scare, according to Bernstein. Core Scientific emerged from bankruptcy about a year ago and signed its $6.7 billion partnership with Nvidia-backed AI startup CoreWeave in August. This gave it a first-mover advantage over other 'hybrid' bitcoin miners, according to Chhugani. Most publicly traded bitcoin miners have pursued the same trend, becoming so-called hybrid miners — those operating both a bitcoin mining business and an AI business. Chhugani noted that after the correction, at an enterprise value of $2.7 million per megawatt, Core is trading closer to pure-play bitcoin mining valuations than data center valuations, despite 70% of its capacity being allocated to AI. Pure-play bitcoin miners such as Mara Holdings and CleanSpark average about $1.5 million per megawatt, while data center companies like Equinix and Iron Mountain average $34 million per megawatt. Analysts from Piper Sandler and Cantor Fitzgerald stated in earlier notes that the DeepSeek-driven sell-off is overdone and creating good buying opportunities in bitcoin miners. However, H.C. Wainwright has a contrarian view on miners' near-term monetization opportunities for AI. Analyst Mike Colonnese told CNBC that hybrid miners like Core will underperform pure-play miners this year
BITCOIN MINING AI HYBRID MINING DEEPSEEK CORE SCIENTIFIC BERSTEIN
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