KBW upgrades Core Scientific after AMD leases raise contracted value, eyes 35% rise

KBW upgrades Core Scientific after AMD leases raise contracted value, eyes 35% rise

William Foxley

Thu, July 30, 2026 at 5:32 PM GMT+3 3 min read

• AMD -1.90%
• CORZ -5.00%

Keefe, Bruyette & Woods upgraded Core Scientific (NASDAQ: CORZ) to Outperform from Market Perform on Thursday, arguing its 529 MW AMD lease package raises the stock's valuation floor despite execution and financing risks.

KBW analyst Stephen Glagola increased his price target to $28 from $25, implying a 35% total return from the report's $20.75 reference price. Core Scientific shares had fallen 20% since KBW downgraded the operator on July 27, one day before the lease announcement.

The 15-year agreements cover 377 MW leased directly to AMD under triple-net terms and 152 MW leased to an unnamed neocloud under modified-gross terms. AMD provides credit support for the neocloud lease throughout its initial term.

Core Scientific says the leases should produce over $14 billion of potential base contracted revenue, and the contracts carry 2.5% annual escalators. Deliveries are set to start at Pecos, Texas, in the first half of 2027 and to hit the full 529 MW by the end of 2028.

Contracted portfolio valued at $23 per share

KBW estimated Core Scientific's contracted portfolio and net debt support equity value of approximately $23 per share when applying a 6.7% cap rate to the new leases. Applying an 8% cap rate across the portfolio produced a value of about $20 per share.

The bank estimated blended trended NOI of $1.76 million per MW, but said that figure may overstate the direct AMD economics because modified-gross leases generally generate more revenue per MW than triple-net contracts. Core Scientific has not disclosed how the $14 billion of potential revenue divides between the two structures.

KBW assumed the neocloud contract was priced 10% above the blended figure, implying approximately $1.69 million of trended NOI per MW for AMD's direct lease.

Reservation rights drive additional upside

AMD can reserve another 1,925 MW through December 2028 under specified conditions. KBW focused on 384 MW of interconnection-backed capacity split evenly between Hunt County, Texas, and Muskogee, Oklahoma, as the most credible expansion opportunity over the next 12 months.

Crediting all 384 MW at a 6.7% cap rate would support a valuation of about $33 per share, according to the report. KBW's $28 target assigns 50% option value to that capacity while incorporating residual net debt and assumed conversion of Core Scientific's 2029 and 2031 convertible notes.

The bank raised its 2027 EBITDA estimate to $629.7 million from $498.6 million as contracted AMD and neocloud capacity enters service.

Core Scientific reported second-quarter revenue of $164.2 million, up 42.5% sequentially, while colocation revenue reached $136.7 million. KBW-defined EBITDA of $27.4 million missed the bank's $31.4 million estimate, partly because cash SG&A included $22.7 million of colocation organizational and site startup costs.

Core Scientific puts construction costs for the AMD program at $11 million to $12 million per MW and intends to finance the build-out with project-level bonds. KBW flagged delivery timing, power availability, supply-chain bottlenecks and customer performance as material risks.

KBW disclosed that it expects to receive or seek investment banking compensation from Core Scientific within the next three months.