Canaccord initiated coverage of Core Scientific with a buy rating, CoinDesk reported.
The report claims that the Bitcoin miner is on the verge of becoming a major player in the AI hosting space.
Canaccord noted that Core Scientific’s mining business has potential upside.
Canaccord has a price target of $16 and the current share price is $12.15.
The company’s 12-year contract with CoreWeave is seen as a transformative deal, the first major high-performance computing data center hosting deal signed by a bitcoin miner.
Canaccord believes that increasing AI hosting revenue, improving cash flow and potential for more site acquisitions are the three major positive drivers for the stock.
About $12 of the target price comes from CoreWeave contracts, $3 comes from surplus electricity supply for AI hosting, and about $1 comes from Bitcoin mining operations.
The company still has about 230 megawatts of power available for bitcoin mining, although nearly 500 megawatts has been redirected to AI hosting.
