Bernstein remains optimistic about Core Scientific (CORZ) despite a sharp 30% drop in the company’s stock earlier this week, driven by concerns from Chinese AI startup DeepSeek about the value of bitcoin miners as data center assets. The report suggests that the stock is now priced at a substantial discount, making it an attractive opportunity.

Core Scientific is positioned as a leader in the AI-driven bitcoin mining space, with 1.3 gigawatts (GW) of power capacity and a long-term 12-year AI partnership with CoreWeave. Analysts led by Gautam Chhugani emphasized that bitcoin miners have a critical 12-18 month window to build hybrid data center operations, while hyperscalers’ capital expenditures remain stable.

The company is expected to meet its goal of launching its first set of data centers in the first half of 2025, continuing to invest in new power sites. Bernstein noted that, despite the recent decline in stock price, Core Scientific’s valuation now reflects bitcoin mining rather than data center valuations, even though AI accounts for 70% of the company’s capacity.

Bernstein has maintained its outperform rating for Core Scientific, with a price target of $17. The stock saw a modest gain of 3.8% early on, trading at $11.90.