Despite DeepSeek’s Dislocation, Bernstein Highlights Core Scientific as Prime AI Pick in Bitcoin Mining

Despite a 30% drop in Core Scientific’s stock this week, driven by concerns raised by the AI startup DeepSeek regarding the valuation of bitcoin miners as data center assets, Bernstein continues to maintain a positive outlook on the company. According to Bernstein’s research, the drop in stock price has created an opportunity, with the stock now trading at a significant discount.

Core Scientific is considered a leader in AI-driven bitcoin mining, with a 1.3 gigawatt (GW) power capacity and a 12-year AI contract with CoreWeave. Bernstein analysts, led by Gautam Chhugani, note that bitcoin miners have a limited 12-18 month period to build hybrid data center businesses while hyperscalers maintain steady capital expenditures.

The company is on track to roll out its first data center cluster in the first half of 2025, and it continues to invest in new power sites. Despite the recent slide in stock price, Core Scientific’s current valuation reflects bitcoin mining rather than data centers, even though 70% of its capacity is allocated to AI operations.

Bernstein has reiterated its outperform rating on Core Scientific, setting a price target of $17. The stock saw an uptick of 3.8% early in trading, rising to $11.90.