MUSKOGEE, Okla. - Core Scientific Inc. (NASDAQ: CORZ), a company specializing in digital infrastructure for high-performance computing and bitcoin mining, has initiated construction on a new 100-megawatt data center. The facility is set to power CoreWeave's NVIDIA (NASDAQ:NVDA) GPUs for a confidential client and is expected to become operational in 2026.
The Muskogee data center is designed to provide around 70 megawatts of critical IT load to support the latest NVIDIA GPUs, with the remaining 30 megawatts allocated for ancillary systems. This center is part of a larger agreement with CoreWeave, involving a total of 500 megawatts of IT load contracted from Core Scientific for high-performance computing (HPC) hosting operations. The contract's potential value stands at approximately $8.7 billion over its 12-year span, with options for two additional five-year periods.
Adam Sullivan, CEO of Core Scientific, emphasized the significance of the project for Muskogee, highlighting the collaborative efforts of Port Muskogee's team, Mayor Patrick Cale, and the state of Oklahoma. Their collective support has been instrumental in establishing Muskogee as a nexus for advanced AI technology, promising economic growth and job creation for the area.
The data center is anticipated to bring substantial economic benefits to Muskogee, with a projected $182 million net impact on the local economy. The facility is expected to support 150 jobs with average salaries surpassing $65,000. The project also promises significant tax revenue, with over $12 million projected in property and sales taxes which will contribute to community development.
Kimbra Scott, Executive Director of Port Muskogee, expressed pride in welcoming Core Scientific and CoreWeave to the community. The partnership is seen as a commitment to economic advancement, with more than $4 billion in capital investment and a considerable net benefit to the local economy over the project's lifetime.
Core Scientific is a leader in providing dedicated facilities for digital asset mining and digital infrastructure services to third-party customers. The company currently operates eight data centers across various states and is in the process of converting some of these facilities to support AI-related workloads under the new contracts.
This news is based on a press release statement from Core Scientific Inc. and contains forward-looking statements that are subject to risks and uncertainties, which could cause actual results to differ materially from projected outcomes.
In other recent news, Core Scientific has been making significant strides following its post-bankruptcy transformation. Jefferies, a global investment banking firm, has given the company a "Buy" rating, acknowledging Core Scientific's successful pivot from Bitcoin mining to building artificial intelligence-focused data centers. This shift has been attributed to the company's skilled data center development team and its strategic utilization of power resources.
In addition to Jefferies, other firms such as Canaccord Genuity and B.Riley have also given Core Scientific a "Buy" rating, reflecting confidence in the company's future business prospects. Canaccord has even raised its price target for the company to $17.00, highlighting Core Scientific's successful contract expansion with CoreWeave. This contract is expected to generate an 80% contribution-like margin for Core Scientific and add approximately $2.0 billion to its projected cumulative revenue over a 12-year period.
Core Scientific's recent developments also include the mining of 345 bitcoins in September and the sale of 370 bitcoins, generating sales proceeds of approximately $22.2 million. However, the company has also announced that CFO Denise Sterling is set to step down by May 2025, and a search for her successor has been initiated. Despite this change, Core Scientific continues to progress, with analysts from Cantor Fitzgerald and H.C. Wainwright giving the company positive ratings based on its recent developments.
InvestingPro Insights
Core Scientific Inc.'s (NASDAQ: CORZ) ambitious data center project in Muskogee aligns with its recent financial performance and market position. According to InvestingPro data, the company's market capitalization stands at $4.42 billion, reflecting investor confidence in its growth strategy.
The company's revenue growth of 15.77% over the last twelve months as of Q3 2024 suggests a solid foundation for expansion projects like the Muskogee data center. Moreover, Core Scientific's EBITDA growth of 200.66% over the same period indicates strong operational efficiency, which will be crucial for managing large-scale projects.
InvestingPro Tips highlight that Core Scientific operates with a moderate level of debt, which is favorable for financing major initiatives such as the new data center. Additionally, the company's liquid assets exceed short-term obligations, providing financial flexibility to support its growth plans.
The stock has shown remarkable performance, with a 328.42% price return over the last six months and a 360.17% return over the past year. This strong market performance could potentially facilitate easier access to capital for future expansions.
It's worth noting that InvestingPro offers 15 additional tips for Core Scientific, providing investors with a comprehensive analysis of the company's prospects. These insights could be particularly valuable given the scale and long-term nature of the Muskogee project.
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