KBW keeps Core Scientific at outperform, says AMD’s 1.9 GW reservation is overlooked
KBW reiterated its Outperform rating and $28 price target on Core Scientific (CORZ), citing overlooked 1.9 GW of AMD reservation capacity. The firm values existing leases at $15.54 per share, with a blended NOI/EV yield of 8.3%. KBW attended Core Scientific's investor day and noted AMD's option for additional capacity. CORZ closed at $15.43 on Tuesday, implying 81.5% upside to the target.
How this was made
The 30-second read
Why it matters
The analyst's valuation framework provides a clear catalyst for short‑term buying, but credit concerns around CoreWeave could limit upside.
Market read
Analyst upgrade creates a near‑term bullish bias for CORZ, while credit spreads on CRWV introduce a counterbalancing risk.
What to watch
Potential regulatory delays in Texas permits and the high cost of CoreWeave's senior notes could dampen upside.
Background
KBW's reiteration follows a prior upgrade after AMD lease announcements, emphasizing the undervalued lease portfolio.
Ticker impact
KBW reiterated Outperform on Core Scientific, set a $28 price target and noted 81.5% upside from the $15.43 close.
upward pressure as investors price in the new $28 target and perceived undervaluation of AMD lease capacity.
KBW's detailed valuation and cap-rate assumptions provide a concrete catalyst for buying pressure.
The note discusses CoreWeave's senior unsecured notes spreads and the market discount applied to its leases, affecting Core Scientific's valuation.
potential downside pressure as investors assess CoreWeave's credit spreads and lease discount.
Spread widening suggests higher risk, but the impact is indirect compared with Core Scientific's upgrade.
Market effects
Highlights valuation challenges in AI‑infrastructure leasing, potentially prompting re‑rating of similar data‑center REITs.
U.S. data‑center sector may see modest buying interest following the upgrade.
Limited to U.S. AI‑infrastructure players; no broader macro effect.
Counterpoint
The upgrade may be premature if AMD's reservation capacity does not materialize as expected.
Key entities
- companyCore Scientific
AI‑infrastructure provider with AMD lease portfolio.
- companyCoreWeave
Tenant and senior note issuer whose spreads affect Core Scientific's valuation.
