Core Insights - The Bitcoin mining sector is witnessing renewed investor interest due to Bitcoin's rally past $70,000 and a shift towards AI-focused business models among key players [1] - Companies like Core Scientific and Iris Energy are repositioning to capitalize on the high-growth AI market [1] Core Scientific (NASDAQ: CORZ) - Core Scientific has a market cap of $3.7 billion and an enterprise value of $4.22 billion, attracting significant institutional interest with over 55% of shares held by institutional investors [3] - The company has entered a transformative 12-year partnership with AI hyperscaler CoreWeave, expected to generate up to $3.5 billion in revenue [3][4] - CoreWeave's contracted high-performance computing capacity across five Core Scientific sites reaches 382 megawatts, enhancing its position in the AI-driven computing sector [4] - Core Scientific plans to issue $400 million in convertible senior notes maturing in 2029, with an option to increase by an additional $60 million, aimed at repaying $267 million in high-interest debt, reducing the interest rate from 12.5% to 3% [5][6] - The current stock price is $14, and the strategic shift towards AI applications presents a compelling growth opportunity for investors [6] Iris Energy Limited (NASDAQ: IREN) - Iris Energy has a market cap of $2 billion and an enterprise value of $1.59 billion, expanding into AI to enhance revenue streams and growth potential [7] - Institutional investors hold a 44% stake in Iris Energy, which generated $3.1 million in revenue from AI cloud services in fiscal year 2024 [8] - The company invested $43.9 million to acquire 1,080 NVIDIA H200 GPUs, increasing its total GPU count to 1,896, expected to yield $32 million in annualized hardware profit [8][9] - Iris Energy reported an EBITDA of $19.6 million, a significant improvement from a loss of $123.2 million the previous year, with Bitcoin mining revenue reaching a record $184.1 million [10] - The stock is currently trading at $10.55, and the company is exploring AI data center opportunities at its 1.4 GW West Texas site [9][10] Market Outlook - With Bitcoin maintaining a price above $70,000 and growing demand for AI, Core Scientific and Iris Energy are well-positioned to benefit from the convergence of AI and Bitcoin mining [11]

Core Insights - U.S. stocks closed mixed, but notable insider trades indicate confidence in company prospects [1] - Insider purchases can signal opportunities to go long on stocks, although they should not be the sole indicator for investment decisions [1] Company Summaries Healthcare Realty Trust - Director Thomas N Bohjalian acquired 14,000 shares at an average price of $17.88, costing approximately $250,320 [3] - The company reported downbeat quarterly sales on August 2 [3] - Healthcare Realty Trust focuses on owning, leasing, and managing outpatient facilities and other healthcare properties [3] Westrock Coffee - Director Joe T Ford acquired 5,000 shares at an average price of $7.64, costing around $38,200 [4] - The company posted downbeat quarterly earnings on August 8 [4] - Westrock Coffee provides integrated coffee, tea, flavors, extracts, and ingredients solutions, serving various industries globally [4] Core Scientific - Director Jarrod M Patten bought 5,021 shares at an average price of $9.68, costing about $1.98 million; the President and CEO also purchased 48,596 shares [5] - Needham initiated coverage on the stock with a Buy rating and a $16 price target on September 4 [5] - Core Scientific is engaged in Blockchain and AI Infrastructure, Digital Asset Self-Mining, and related services [5]

Core Viewpoint - Core Scientific, Inc. (CORZ) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Impact - The Zacks rating system is based on the changing earnings picture of a company, specifically tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, making the Zacks rating system valuable for investors [3][5]. - The recent upgrade for Core Scientific indicates an improvement in the company's underlying business, which is expected to positively influence its stock price [6]. Earnings Estimate Revisions - Core Scientific is projected to earn -$3.87 per share for the fiscal year ending December 2024, reflecting a year-over-year change of -2176.5% [9]. - Over the past three months, the Zacks Consensus Estimate for Core Scientific has increased by 105.9%, indicating a positive trend in earnings estimates [9]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [8]. - The upgrade to Zacks Rank 2 places Core Scientific in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [11].

When it comes to short-term investing or trading, they say "the trend is your friend." And there's no denying that this is the most profitable strategy. But making sure of the sustainability of a trend to profit from it is easier said than done. The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the s ...

0000000000 objectifphoto/iStock via Getty Images Bitcoin (BTC-USD) has been highly volatile after the halving event on April 19 as per the chart below, flirting with the $73 level then dipping to $50K, and stabilizing around $60K, for now. In its wake, Core Scientific (NASDAQ:CORZ) also suffered, but still delivered a net upside of above 200% and was trading around $9,75 at the time of writing VAL Core Scientific Inc (CORZ) Price Bitcoin Price (LBTCUSD) 9.75 60912.59 12.00 70000.00 10.50 67500.00 9.75 65000 ...

| --- | --- | --- | --- | |-------------------------------------|-------|-------|-------| | | | | | | | | | | | Second Quarter Fiscal 2024 Earnings | | | | | Presentation | | | | | Adam Sullivan, CEO | | | | | Denise Sterling, CFO | | | | | August 7, 2024 | | | | 2 FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding proj ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $141 million, with $111 million from digital asset self-mining, $25 million from digital asset hosted mining, and $5.5 million from HPC hosting [16][17] - Gross profit increased by 5% to $39 million, while operating income declined by 31% to $7 million [16] - Net loss for Q2 2024 was $804.9 million, significantly higher than the $9.3 million loss in the same period last year, primarily due to non-cash mark-to-market adjustments [27] - Adjusted EBITDA was $46 million, reflecting a 2% year-over-year increase [17][29] Business Line Data and Key Metrics Changes - Digital asset self-mining revenue increased by 14% year-over-year, driven by a 134% increase in bitcoin prices and a 28% increase in self-mining hash rate [18] - HPC hosting revenue of $5.5 million exceeded costs by $0.6 million, resulting in a GAAP gross margin of 11% [20] - The self-mined to hosted mining mix was 79% to 21% as of June 30, 2024 [30] Market Data and Key Metrics Changes - Power costs decreased to $0.0402 per kilowatt hour from $0.0425 in the prior year [25] - The company anticipates average power costs in 2024 to be between $0.042 and $0.044 per kilowatt hour [29] Company Strategy and Development Direction - The company is transitioning to HPC hosting while maintaining its position as a leading bitcoin mining company, with a focus on operational efficiency and cost management [14][42] - Core Scientific aims to expand its hosting business and diversify its client base, targeting both brownfield and greenfield opportunities [47][66] - The company plans to acquire 10,000 to 15,000 additional bitcoin miners in 2024 to enhance its self-mining fleet [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy and achieve significant revenue from HPC hosting contracts, projecting $6.7 billion in total revenue over 12 years [38][44] - The company is focused on improving its capital structure and reducing debt, with a significant reduction in secured convertible notes [34][68] - Management highlighted the importance of site selection and relationships with local utilities as key factors for future growth [92][94] Other Important Information - The company completed 72 megawatts of infrastructure at its Denton, Texas site, bringing total operational infrastructure to approximately 830 megawatts [11] - Stock price appreciation allowed for the conversion of $260 million in secured convertible notes, significantly reducing debt [12][33] Q&A Session Summary Question: Insights on funding for new HPC or bitcoin mining sites - Management indicated that contracts with CoreWeave open up various funding opportunities and that they are targeting less expensive sites for expansion [58][59] Question: Competitive dynamics in the HPC site selection market - Management noted competition from major players like Equinix and Digital Realty but emphasized their focus on brownfield opportunities [66] Question: Thoughts on leverage and balance sheet changes - Management stated that they are comfortable with their current capital structure but are evaluating opportunities to strengthen it as they grow [68][70] Question: Status of remaining 112 megawatts of data center capacity - Management confirmed ongoing discussions with CoreWeave and emphasized the importance of client diversification [72][74] Question: Impact of delays in black well shipments on delivery timelines - Management is closely monitoring the situation and is focused on executing facility deliveries alongside GPU shipments [76] Question: Supply and demand imbalances for energy - Management described the current market as tight, requiring expertise in site selection and negotiations [78][80] Question: International expansion plans - Management confirmed they are considering international opportunities but are currently focused on domestic negotiations [102][104]

Financial Performance - Total revenue for the six months ended June 30, 2024 was $320.4 million, compared to $247.6 million for the same period in 2023[179] - Operating income for the six months ended June 30, 2024 was $61.8 million, compared to $17.1 million for the same period in 2023[179] - Net loss for the six months ended June 30, 2024 was $594.2 million, compared to $9.6 million for the same period in 2023[179] - Adjusted EBITDA for the six months ended June 30, 2024 was $134.0 million, compared to $85.3 million for the same period in 2023[179] - Total revenue increased by $14.2 million or 11%, to $141.1 million for the three months ended June 30, 2024, from $126.9 million for the three months ended June 30, 2023[245] - Net loss increased by $795.6 million to $804.9 million for the three months ended June 30, 2024, from $9.3 million for the three months ended June 30, 2023[243] - Net loss widened to $594.2 million in the first half of 2024, compared to a net loss of $9.6 million in the same period of 2023, driven by non-operating expenses[266] - Total revenue increased by $72.8 million or 29%, to $320.4 million for the six months ended June 30, 2024, from $247.6 million for the six months ended June 30, 2023[268] - Operating income increased significantly to $61.8 million for the six months ended June 30, 2024, compared to $17.1 million in the same period in 2023, driven by higher gross profit and reduced operating expenses[289] Mining Operations and Hash Rate - The company secured approximately 1,200 MW of contracted power capacity as of June 30, 2024[178] - The company improved its average self-mining fleet energy efficiency to 24.7 joules per terahash for the three months ended June 30, 2024, compared to 26.9 joules per terahash for the three months ended March 31, 2024[178] - The company's total mining equipment hash rate was 24.6 EH/s as of June 30, 2024, with 19.4 EH/s from self-miners and 5.2 EH/s from hosted miners[191] - The company's digital asset self-mining revenue, net of receivables, was $261.6 million for the six months ended June 30, 2024, compared to $194.9 million for the same period in 2023[193] - Self-mining hash rate increased to 19.4 EH/s as of June 30, 2024, up 28% from 15.1 EH/s in 2023[220] - Combined self-mining and customer hosting hash rate increased 10% to 24.6 EH/s as of June 30, 2024, from 22.3 EH/s in 2023[220] - The company's self-mining hash rate increased 28% to 19.4 EH/s for the six months ended June 30, 2024, driven by the deployment of approximately 19,000 additional miners[287] Bitcoin and Market Volatility - The company's Bitcoin protocol halving in April 2024 reduced bitcoin rewards from 6.25 to 3.125 per solved block, potentially impacting revenue and gross profit by 50%[181] - Bitcoin's network hash rate has increased due to rising competition, requiring the company to upgrade mining equipment to remain profitable[196][200][201] - The company's financial performance is heavily dependent on the volatile market price of bitcoin, which can be influenced by factors like regulation and media reporting[197][198] - Bitcoin's halving events reduce mining rewards, with the next halving expected in 2028, potentially impacting revenue unless offset by price increases or reduced difficulty[203][204] - Bitcoin prices for the three months ended June 30, 2024, ranged from $56,643 to $72,674, with an average price of $65,677[317] - A hypothetical 10% increase or decrease in the price of bitcoin during the three months ended June 30, 2024, would have increased or decreased net loss by approximately $11.1 million[317] - The company did not hold any bitcoin as of June 30, 2024[316] Costs and Expenses - Electricity costs are a major operating expense, with seasonal demand and geopolitical factors impacting prices and availability[205] - Total cost to self-mine one bitcoin increased to $29,879 in Q2 2024, up from $13,471 in Q2 2023[218] - Direct power cost per bitcoin self-mined rose to $24,533 in Q2 2024, compared to $11,253 in Q2 2023[218] - Total cash-based hash cost decreased to $0.030 per terahash in Q2 2024, down from $0.036 in Q2 2023[218] - Cost of revenue increased by $12.3 million or 14%, to $102.3 million for the three months ended June 30, 2024, from $90.0 million for the three months ended June 30, 2023[248] - Cost of revenue increased by $25.1 million or 14%, to $203.9 million for the six months ended June 30, 2024, from $178.8 million for the six months ended June 30, 2023[271] Revenue Segments - Digital asset self-mining revenue increased by $13.7 million or 14%, to $110.7 million for the three months ended June 30, 2024, from $97.1 million for the three months ended June 30, 2023[246] - Total digital asset hosted mining revenue from customers decreased by $1.5 million or 6%, to $24.8 million for the three months ended June 30, 2024, from $26.3 million for the three months ended June 30, 2023[247] - Total HPC hosting revenue was $5.5 million for the three months ended June 30, 2024, compared to nil for the same period in the prior year[247] - Digital asset self-mining revenue increased by $65.6 million or 34%, to $260.7 million for the six months ended June 30, 2024, from $195.1 million for the six months ended June 30, 2023[269] - Total digital asset hosted mining revenue from customers increased by $8.9 million or 20%, to $54.2 million for the six months ended June 30, 2024, from $45.2 million for the six months ended June 30, 2023[270] - Total HPC hosting revenue was $5.5 million for the six months ended June 30, 2024, compared to nil for the same period in the prior year[270] - Digital Asset Self-Mining segment revenue increased by 14% to $110.7 million in Q2 2024, driven by a 134% increase in bitcoin price and a 28% increase in self-mining hash rate to 19.4 EH/s[262] - Digital Asset Hosted Mining segment revenue decreased by 17% to $24.8 million in Q2 2024, but gross margin improved to 30% from 23% due to more profitable hosting arrangements[263] - HPC Hosting segment generated $5.5 million in revenue and $0.6 million in gross profit in Q2 2024, as it began operations during the quarter[264] - Digital Asset Self-Mining segment revenue increased by 34% to $260.7 million, with gross profit rising 78% to $99.1 million and gross margin improving from 28% to 38%[285] - Digital Asset Hosted Mining segment revenue grew 3% to $54.2 million, with gross profit increasing 27% to $16.7 million and gross margin improving from 25% to 31%[285] - HPC Hosting segment generated $5.5 million in revenue and $0.6 million in gross profit, with an 11% gross margin, as the segment began operations in Q2 2024[285] Gross Profit and Margins - Gross profit increased by $1.9 million or 5%, to $38.8 million for the three months ended June 30, 2024, from $37.0 million for the three months ended June 30, 2023[248] - Gross profit increased by $47.7 million or 69%, to $116.5 million for the six months ended June 30, 2024, from $68.7 million for the six months ended June 30, 2023[271] - Digital Asset Self-Mining segment gross profit increased by 2% to $30.7 million in Q2 2024, despite a 52% decrease in bitcoin mined due to the April 2024 halving[262] - Digital Asset Hosted Mining segment gross profit increased by 11% to $7.4 million in Q2 2024, reflecting improved profitability[263] - Consolidated total revenue increased 29% to $320.4 million, with gross profit rising 69% to $116.5 million and gross margin improving from 28% to 36%[285] Operating Expenses - Research and development expenses increased by $0.5 million or 33%, to $2.2 million for the three months ended June 30, 2024, from $1.6 million for the three months ended June 30, 2023[243] - Sales and marketing expenses increased by $1.9 million or 174%, to $3.0 million for the three months ended June 30, 2024, from $1.1 million for the three months ended June 30, 2023[243] - General and administrative expenses increased by $1.8 million or 8%, to $26.2 million for the three months ended June 30, 2024, from $24.4 million for the three months ended June 30, 2023[243] - Total operating expenses increased by $4.3 million (16%) to $31.4 million for the three months ended June 30, 2024[254] - Research and development expenses increased by $0.5 million (33%) to $2.2 million for the three months ended June 30, 2024[255] - Sales and marketing expenses increased by $1.9 million to $3.0 million for the three months ended June 30, 2024[255] - General and administrative expenses increased by $1.8 million to $26.2 million for the three months ended June 30, 2024[256] - Research and development expenses increased $0.9 million or 30%, to $4.0 million for the six months ended June 30, 2024, from $3.1 million for the six months ended June 30, 2023[279] - Sales and marketing expenses increased $1.9 million or 89%, to $3.9 million for the six months ended June 30, 2024, from $2.1 million for the six months ended June 30, 2023[279] - General and administrative expenses decreased $5.8 million or 13%, to $40.4 million for the six months ended June 30, 2024, from $46.2 million for the six months ended June 30, 2023[280] - Total operating expenses decreased $3.0 million or 6%, to $48.3 million for the six months ended June 30, 2024, from $51.3 million for the six months ended June 30, 2023[278] Non-Operating Expenses and Taxes - Total non-operating expenses, net increased by $792.7 million to $811.3 million for the three months ended June 30, 2024, driven by a $796.0 million change in fair value of warrant and contingent value rights[258] - Income tax expense was $0.1 million for both the three months ended June 30, 2024, and June 30, 2023[259] - Total non-operating expenses, net increased by $629.2 million to $655.7 million for the six months ended June 30, 2024, driven by a $735.9 million change in fair value of warrant and contingent value rights due to a stock price increase from $3.44 to $9.30 per share[282] - Income tax expense for the six months ended June 30, 2024, was $0.4 million, with an effective tax rate lower than the federal statutory rate of 21% due to a valuation allowance on deferred tax assets and non-deductible expenses[283] Cash Flow and Liquidity - Cash and cash equivalents increased by 91% to $96.1 million as of June 30, 2024, compared to $50.4 million as of December 31, 2023[295] - Restricted cash decreased by 95% to $1.0 million as of June 30, 2024, compared to $19.3 million as of December 31, 2023[295] - Total cash, cash equivalents, and restricted cash increased by 39% to $97.1 million as of June 30, 2024, compared to $69.7 million as of December 31, 2023[295] - Net cash provided by operating activities decreased to $23.4 million for the six months ended June 30, 2024, compared to $38.0 million for the same period in 2023[300] - Net cash used in investing activities increased to $35.2 million for the six months ended June 30, 2024, compared to $2.5 million for the same period in 2023[301] - Net cash provided by financing activities was $39.2 million for the six months ended June 30, 2024, compared to a net cash used of $11.0 million for the same period in 2023[302] - The company entered into a new $80.0 million credit and guaranty agreement (Exit Credit Agreement) upon emerging from bankruptcy, with $20.0 million of undrawn borrowing capacity remaining[291] Competition and Differentiation - The company faces significant competition in acquiring new miners, raising capital, and securing low-cost electricity and high-power sites[207][209] - The company differentiates itself through proprietary data center designs, thermodynamic solutions, and expertise in mining equipment optimization[212][213] - The company plans to expand its miner fleet and invest in R&D to maintain competitiveness and develop new technologies[209][213] Regulatory Environment - Regulatory developments, including U.S. and international efforts, could impact the company's operations and the broader digital asset industry[214][215][216] - The company will cease to be an emerging growth company as of December 31, 2024, due to its market value exceeding $700 million[313] Other Financial Metrics - The company uses non-GAAP financial measures like Adjusted EBITDA and key operating metrics such as self-mining hash rate to evaluate performance[217] - Adjusted EBITDA for Q2 2024 was $46.0 million, compared to $45.0 million in Q2 2023[218] - The top three hosting customers accounted for 87% of the Digital Asset Hosting segment's total revenue for the six months ended June 30, 2024, up from 72% in the same period in 2023[286]

Financial Performance - Net loss of $804.9 million, primarily due to a $796.0 million non-cash mark-to-market adjustment for warrants and contingent value rights[1] - Generated operating income of $6.6 million, a decrease of $2.9 million compared to Q2 2023[1] - Adjusted EBITDA of $46.0 million, an increase of $1.0 million compared to Q2 2023[1] - Total revenue of $141.1 million, consisting of $110.7 million from digital asset self-mining, $24.8 million from hosted mining, and $5.5 million from HPC hosting[4] - Total revenue for Q2 2024 increased to $141.1 million, up from $126.9 million in Q2 2023[23] - Gross profit for Q2 2024 was $38.8 million, slightly higher than $37.0 million in Q2 2023[23] - Net loss for Q2 2024 was $804.9 million, significantly higher than $9.3 million in Q2 2023[23] - Adjusted EBITDA for Q2 2024 was $46.04 million, compared to $44.99 million for the same period in 2023[29] - Net loss for Q2 2024 was $804.90 million, compared to a net loss of $9.26 million for the same period in 2023[29] Revenue Breakdown - Digital asset self-mining revenue in excess of mining cost was $30.7 million (28% gross margin), an increase of $0.5 million compared to Q2 2023[5] - Digital asset hosted mining revenue in excess of hosting cost was $7.4 million (30% gross margin), an increase of $0.7 million compared to Q2 2023[6] - HPC hosting revenue in excess of hosting cost was $0.6 million (11% gross margin), with operations commencing in Q2 2024[6] - Digital asset self-mining revenue grew to $110.7 million in Q2 2024, compared to $97.1 million in Q2 2023[23] - Digital Asset Self-Mining revenue for Q2 2024 was $97.08 million, compared to $260.70 million for the six months ended June 30, 2024, with a gross margin of 31% for Q2 2024 and 38% for the six-month period[25] - Digital Asset Hosted Mining revenue for Q2 2024 was $29.83 million, with a gross margin of 23%, compared to $54.17 million and a 31% gross margin for the six-month period[25] - Consolidated total revenue for Q2 2024 was $126.91 million, with a gross margin of 29%, compared to $320.39 million and a 36% gross margin for the six-month period[25] - HPC hosting revenue for the six months ended June 30, 2024, was $5.52 million, with a gross margin of 11%[25] Operational Highlights - Contracted 382 megawatts of infrastructure for HPC hosting, representing potential revenue of approximately $6.7 billion over 12 years[1] - Earned 1,680 self-mined bitcoin in Q2 2024[1] Cash and Assets - Cash and cash equivalents of $96.1 million as of June 30, 2024[3] - Cash and cash equivalents increased to $96.1 million as of June 30, 2024, up from $50.4 million at the end of 2023[22] - Total assets grew to $761.5 million as of June 30, 2024, compared to $712.2 million at the end of 2023[22] - Total liabilities increased to $1.85 billion as of June 30, 2024, up from $1.31 billion at the end of 2023[22] Expenses - Research and development expenses for Q2 2024 were $2.2 million, up from $1.6 million in Q2 2023[23] - Sales and marketing expenses for Q2 2024 were $3.0 million, compared to $1.1 million in Q2 2023[23] - General and administrative expenses for Q2 2024 were $26.2 million, up from $24.4 million in Q2 2023[23] - Depreciation and amortization for Q2 2024 was $29.48 million, compared to $20.47 million for the same period in 2023[29] - Stock-based compensation expense for Q2 2024 was $8.49 million, compared to $14.28 million for the same period in 2023[29] - Reorganization items, net for Q2 2024 were $0, compared to $18.46 million for the same period in 2023[29] - Change in fair value of warrant and contingent value rights for Q2 2024 was $796.04 million, compared to $0 for the same period in 2023[29]

Shares of Core Scientific, Inc. (CORZ) have gained 1.6% over the past four weeks to close the last trading session at $9.71, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $14.71 indicates a potential upside of 51.5%. The average comprises seven short-term price targets ranging from a low of $8.50 to a high of $20, with a standard deviation of $3.53. While the lowest estimate i ...