Core Scientific Shares Face Critical Test Amid Mixed Signals

Core Scientific US21874A1060

Core Scientific finds itself at a pivotal juncture following a period of intense trading activity and shifting institutional sentiment. The stock's recent performance paints a picture of a company under pressure, yet some analysts see a path to recovery, creating a complex and divided outlook for investors.

Despite recent headwinds, certain market experts maintain a constructive view. Citizens JMP recently upgraded its rating to "Outperform," assigning a price target of $30.00. This bullish stance is reportedly based on expectations for stronger demand in high-performance computing (HPC) and artificial intelligence infrastructure. The broader analyst consensus, however, sets a more modest price target of $23.18. This upgrade coincides with positive sentiment from the broader core AI industry, which has surpassed a significant threshold of 1 trillion yuan.

Trading Dynamics and Institutional Moves

The stock was among the top five most-traded blockchain equities by volume recently, highlighting heightened investor interest as the year concludes. This activity has unfolded alongside notable institutional repositioning. During the third quarter, Voya Investment Management significantly reduced its stake by 40.2%. It now holds 472,816 shares, a position valued at approximately $8.48 million. These shifts have occurred as the share price has retreated more than 19.34% since the release of the Q3 earnings report.

Quarterly Performance Breakdown

The company's third-quarter results presented a mixed financial picture, with key metrics sending divergent signals:
- Revenue: Total revenue reached $81.1 million, falling short of the $107.2 million expectation.
- High-Density Colocation: This segment showed strength, with revenue increasing to $15.0 million from $10.3 million in the prior-year period.
- Bitcoin Self-Mining: Revenue here declined to $57.4 million, driven primarily by a 55% reduction in the amount of bitcoin mined.
- Bottom Line: The company reported a net loss of $146.7 million, or $0.46 per share. This loss was notably narrower than the consensus estimate of a $0.85 per-share loss.

Capital expenditures for the quarter were substantial at $244.5 million. The company noted that $196.4 million of this was funded through contractual arrangements with CoreWeave. This indicates an ongoing operational relationship, despite the formal termination of a merger agreement between the two parties in late October.

Forward-Looking Catalysts and Risks

Market attention is now focused on two immediate benchmarks: the 200-day moving average at $15.74 and the upcoming fourth-quarter earnings release scheduled for February 27, 2026. Expectations for that report are already taking shape, with analysts forecasting revenue of approximately $108.48 million and a GAAP earnings per share (EPS) loss of $0.14.

The near-term trajectory appears heavily dependent on whether the company can meet these targets. Delivering results that are close to these forecasts could alleviate selling pressure and improve chances for a share price recovery. Conversely, should revenue and profitability metrics disappoint, the stock will likely remain in a volatile state as investors reassess its growth narrative.