Keefe, Bruyette & Woods upgraded Core Scientific (NASDAQ: CORZ) to Outperform from Market Perform on Thursday, arguing its 529 MW AMD lease package raises the stock’s valuation floor despite execution and financing risks.
KBW analyst Stephen Glagola increased his price target to $28 from $25, implying a 35% total return from the report’s $20.75 reference price
Core Scientific shares had fallen 20% since KBW downgraded the operator on July 27, one day before the lease announcement. The 15-year agreements cover 377 MW leased directly to AMD under triple-net terms and 152 MW leased to an unnamed neocloud under modified-gross terms. AMD provides credit support for the neocloud lease throughout its initial term.
Core Scientific says the leases should produce over $14 billion of potential base contracted revenue, and the contracts carry 2.5% annual escalators. Deliveries are set to start at Pecos, Texas, in the first half of 2027 and to hit the full 529 MW by the end of 2028. Contracted portfolio valued at $23 per share KBW estimated Core Scientific’s contracted portfolio and net debt support equity value of approximately $23 per share when applying a 6.7% cap rate to the new leases.