Megawatts, Missed Buyouts, And A Valuation On Caffeine

Walked-away takeovers, AI data center dreams, and a price tag stuck between bargain and bubble.

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Noah Zelvis
November 30, 2025

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Think about three main things: who really controls the power and concrete everyone suddenly wants, how much of today’s share price is backed by signed contracts, and whether the pivot from miner to landlord shows up in cash flow instead of just adjectives.

The gap between those is where your edge lives.

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What Just Happened

Core Scientific (NASDAQ: CORZ) has had a roller-coaster year. The stock trades in the mid-teens with a market cap of around 5–6 billion, after ripping off the lows and then cooling from the low-20s.

On the scoreboard:

  • Year to date, the stock is solidly green, with one-year returns in the high teens

  • The 52-week range runs from roughly 6 to nearly 24

  • The trailing P/E sits north of 300 because the earnings base is still small

Three headlines matter:

  • A high-profile all-cash buyout attempt from CoreWeave was rejected twice, and the merger agreement was terminated after shareholders refused to approve it.

  • Analysts piled in: Bernstein raised its target from 17 to 24 with a Buy; Craig-Hallum upgraded from Hold to Buy with a 27 target; Jefferies kept Buy with a 24 target.

  • The story shifted from bitcoin miner to AI infrastructure landlord, with investors told to focus on megawatts and leases rather than just rigs and coins.

Net result: it trades like a jumpy small cap even though it looks mid-cap on paper.

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The Strategy
The old plan was simple: secure cheap power, pack sites with mining rigs, and ride the bitcoin cycle. The new plan:

  • Use that power and real estate to host high-density compute for AI and high-performance workloads

  • Lock in multi-year, REIT-style lease deals tied to megawatts and uptime

  • Let bitcoin become the flexible side business rather than the main reason to own the stock

Core Scientific runs large, power-heavy sites originally built for mining. It now has:

  • Roughly 590 megawatts under lease agreements with CoreWeave

  • A development pipeline that could add significant extra capacity over the next few years

On paper, it looks more like a niche data-center landlord with a crypto side hustle than a pure miner. In theory, you get steadier, contract-backed cash flows plus optional upside when crypto cooperates.

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Why The Stock Looks Wobbly Anyway
If the strategy sounds smart, why does the chart twitch so much?

  • The valuation is aggressive. A price-to-sales ratio in the high teens is far above the 4–6 range for many software and infra peers.

  • Profitability is still early. Analysts expect a clear turn into the black, but a P/E in the hundreds tells you a lot of hope is priced in.

  • Customer concentration is real. A huge chunk of the future value runs through one anchor tenant, CoreWeave. Great when things are good, brutal if they are not.

  • Even friendly analysts talk about froth. Rejected buyouts at higher implied prices tell you shareholders are benchmarking against hot AI trades, not just cold hard cash flows.

So you have genuine assets and real demand, wrapped in a price that assumes the pivot works with limited drama.

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The Good Stuff You Can Bank On

  • Real assets in a scarce spot
    This is not a slide deck story. Core Scientific controls high-density sites, substations, and hundreds of megawatts of power at a time when AI data centers are running into grid and site constraints.

  • Serious investor interest
    Around 78 hedge funds hold the stock. That does not guarantee success, but it shows institutional money is paying attention.

  • Analyst upside is meaningful
    Targets in the mid-20s imply roughly 30%+ upside from mid-teens levels if the AI landlord story plays out.

  • Optionality between cycles
    If bitcoin rallies, mining economics improve. If AI demand stays strong, long-term leases on power and space can re-rate the business more like infrastructure. In a good outcome, you are not locked into a single macro theme.

  • Some fair-value work leans positive
    External models that assume stronger growth and margin expansion land around 25 per share and up, arguing the stock is still underpriced if execution is solid.

The Rub You Should Respect

  • Sales multiples doing most of the work
    A price-to-sales ratio near 18–19 versus a sector average closer to 5 is a lot of air under the feet. If AI infrastructure as a theme cools, that multiple can normalize faster than fundamentals catch up.

  • Tenant concentration is loud
    A big piece of the bull math hangs on one customer and one set of leases. Any slowdown, repricing, or contractual friction with CoreWeave hits the story directly.

  • Pivot execution is not trivial
    Running AI-grade data centers for demanding tenants is not the same as pointing miners at a pool. Service levels, networking, cooling, and customer expectations are all higher.

  • Crypto still matters
    Mining is supposed to be the sidecar, but it still feeds into cash and sentiment. A long crypto slump while capex stays high would test patience.

  • Fair-value cuts both ways
    Other frameworks highlight that on simple sales ratios the stock screens expensive, with a fair P/S closer to 6–7. That is another way of saying a big growth premium is already baked in.

What This Means For The Next 3–4 Quarters
This setup is less about instant fireworks and more about proving the adult version of the story.

You want to see:

  • Additional megawatts actually signed with tenants, not just listed as pipeline

  • Clear improvement in operating and free cash flow as leases ramp

  • Mining revenue becoming the backup singer, not the lead vocal

  • Tenant mix broadening beyond a single dominant customer

  • Capex and financing choices that do not require a steady drip of fresh equity

If that shows up, today’s volatility starts to look like the messy middle of a transition rather than the end of a fad.

Bull Vs. Bear, Lightning Round

Bull case:

  • AI data-center demand stays strong, and power-rich platforms get valued more like premium infrastructure.

  • CoreWeave leases hold up, new tenants sign on, and cash flows ramp fast enough to justify REIT-style valuation math.

  • Bitcoin holds up or rallies, giving an extra boost to earnings while the pivot builds out.

  • Mid-20s price targets end up looking conservative as more megawatts get locked in at attractive terms.

Bear case:

  • AI enthusiasm cools, and the market stops paying high-teens sales multiples for anything with power and GPUs in the marketing deck.

  • Customer concentration bites if CoreWeave slows, renegotiates, or changes strategy.

  • Crypto drifts lower just as capital needs stay elevated.

  • Investors realize they paid infrastructure prices for a business that still behaves like a leveraged miner with extra steps.

Valuation

Right now you are paying a premium price for a pivot: from miner to AI landlord, from volatile revenue to contracted power income. The optimistic read says the market is still underestimating the long-term value of those megawatts and leases. The cautious read says you are paying nearly nineteen times sales and a triple-digit earnings multiple in a corner of tech that has seen more than one boom and bust.

If the company lands and renews leases at scale, broadens its tenant base, and turns those contracts into visible, growing cash, today’s mid-teens price can age well. If not, a lot of that premium can vanish long before the physical assets change.

Action Recap

✅ Starter: Consider a small, high-volatility position if you want targeted exposure to AI-driven power and data-center demand
✅ Add On Proof: Only after more capacity is signed, cash flow clearly improves, and dependence on a single tenant starts to fade
⚠️ Trim On Trouble: If AI-infra sentiment resets, key contracts wobble, or cash generation lags the big promises
👀 Watch Next: New lease announcements, the mix of AI versus mining revenue, tenant concentration, and whether the stock keeps trading like infrastructure or slides back into the miner bucket

That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.

Best Regards,
—Noah Zelvis
Tech Stock Insider