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With CoreWeave being one of the key high-performance computing (HPC) customers of Core Scientific, HC Wainwright analysts think the $12 billion OpenAI deal bodes well for the Texas-headquartered company.
Shares of Core Scientific Inc. (CORZ) gained almost 8% in Tuesday’s regular session and extended gains during after-hours trading after analysts at HC Wainwright reiterated their rating for the stock.
According to The Fly, HC Wainwright reiterated its ‘Buy’ rating with a price target of $17 for Core Scientific. This implies an upside of nearly 97% based the stock’s closing price on Tuesday.
CoreWeave struck a five-year deal worth $11.9 billion with OpenAI to provide the Sam Altman-led startup with artificial intelligence (AI) infrastructure.
OpenAI will also receive $350 million in CoreWeave stock through private placement at the time of its initial public offer (IPO.)
With CoreWeave being one of the key high-performance computing (HPC) customers of Core Scientific, HC Wainwright analysts think this deal bodes well for the Texas-headquartered company.
The brokerage noted that while there have been rumors that CoreWeave could drop Core Scientific “at will,” its sources suggest that is untrue. It also questioned the logic in these rumors and added that it is one of the “strong Core Scientific bulls.”
HC Wainwright recommends that investors consider initiating or building an existing position in the stock at current levels.
Retail sentiment on Stocktwits around Core Scientific remained in the ‘extremely bullish’ territory, while message volumes were at ‘extremely high’ levels at the time of writing.
One user thinks that Core Scientific has proven that it can execute when it comes to the HPC business, underscoring their bullish outlook on the stock.
Core Scientific’s stock has been on a downtrend this year, falling nearly 39% year-to-date.
In contrast, the stock has more than doubled over the past year, with gains of almost 133%.
Data from FinChat shows that of the 16 brokerage calls, there are 11 ‘Buy’ and four ‘Outperform’ ratings, and one ‘Hold’ recommendation.
The average price target is $19.50, implying a 126% upside from Tuesday’s closing price.
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