Bitcoin miner stocks surge as AI demand grows, Jefferies issues 'buy' rating on Core Scientific

Shares in several publicly traded U.S. bitcoin mining stocks are trading sharply higher in Monday's session. One stock in particular received a new bullish rating from the sell side, which appears to be pushing up the entire sector.

"We are seeing two big drivers of bitcoin miner stock appreciation working at the same time," Benchmark's Mark Palmer told The Block, "with the price of bitcoin rising at the same time that enthusiasm for bitcoin mining stocks as plays on the growth of AI has returned."

Before Monday's opening bell, Jefferies analyst Jonathan Peterson initiated a "buy" rating and $19 price target on Core Scientific (ticker CORZ).

CORZ closed up 6.2% to $14.20 per share. The stock is up more than 300% in the year-to-date period.

"While all the miner stocks are getting a lift from the bitcoin price rally, it is the subset of the miners such as IREN, Hut 8, Bitdeer, and TeraWulf  – those that have more of a focus on powering AI projects – that are outperforming as they are perceived as beneficiaries of both drivers," Palmer said.

This past summer, Core Scientific signed a 12-year deal with AI Hyperscaler CoreWeave, which could be worth up to $3.5 billion in total revenue. The miner has signed three contracts, adding 70MW and 112MW deals to its first agreement for 200MW. Jefferies expects many big tech companies to watch the CoreWeave developments closely, and "successful execution closely will convince decision makers to sign future development leases."

"Impressive post-bankruptcy comeback story as the company leverages its significant access to power — previously earmarked for Bitcoin mining — to build AI-focused data centers," Peterson wrote in the note to clients. "While there was certainly a level of luck involved in this transition, we believe CORZ deserves credit for an experienced DC development team that is capable and prepared for this pivot."

Core Scientific CEO Adam Sullivan recently said the bitcoin miner can grow “exponentially” over the next few years.

"Signing up another 500MW or 1GW of deals over the course of the next few years puts us in a position where we’re not a $2.5 billion company, we are potentially a $25 to $30 billion company," Sullivan told Bernstein analysts.

Along with the price of bitcoin rising about 2% over the past 24 hours, the bullish initiation from Jefferies sent other bitcoin stocks higher. Bitdeer (BTDR) led the way, surging just over 24%, while shares of Iris Energy (IREN), Gryphon Digital (GRYP) and Hut 8 (HUT) closed the day up more than 15%. Others such as MARA, Riot Platofrms (RIOT) and CleanSpark (CLSK) were up a more modest 9-111%.

In a separate interview this month with Bernstein analysts, Riot Platforms CEO Jason Les said the company would be open to considering AI opportunities if the right partner and deal structure came along.