We recently compiled a list of the 10 Best Hot Stocks To Buy Right Now. In this article, we are going to take a look at where Core Scientific, Inc. (NASDAQ:CORZ) stands against the other hot stocks.
While the market is seeing significant positives after the Fed rate cut, there have been some pressures. For example, dockworkers from the International Longshoremen’s Association (ILA) have gone on strike at major U.S. ports along the East and Gulf coasts, marking the first such strike in nearly 50 years. The dispute involves a six-year contract covering 25,000 workers, with the ILA demanding significant wage increases and addressing concerns over automation.
While the US Maritime Alliance has offered wage and pension boosts, negotiations have still stalled. The strike could cause major disruptions to imports, especially food, clothing, and car shipments, with potential economic losses of $4 or $5 billion per week.
Moreover, CBS reported that Hurricane Helene is projected to be one of the most expensive storms in U.S. history, with Moody’s Analytics estimating property damage between $15 and $26 billion. AccuWeather forecasts that the overall damage and economic loss could reach up to $110 billion.
Central Banks, Port Strikes, and Inflation Risks: What Lies Ahead
Deepak Puri, Deutsche Bank Private Bank CIO of the Americas, recently joined CNBC’s ‘Money Movers’ as he discussed the current high expectations in the U.S. economy and noted that while inflation and employment are relatively stable, challenges lie ahead due to factors like the port strike, global conflicts, and post-hurricane reconstruction.
He mentioned that Chicago Fed President, Austan Goolsbee has highlighted the difficulty in maintaining the current economic balance. Puri advises patience in the markets due to various uncertainties, including the upcoming election.
Puri explained that while many central banks are lowering interest rates, it is uncertain whether the U.S. economy will avoid a downturn. Inflation remains a risk, and the U.S. port strike could cause serious economic problems if it lasts long, even though it hasn’t yet impacted the market much. He warned that several issues combined could affect inflation and overall economic performance.
When discussing the balance between inflation and jobs, the CIO said that concerns about the job market were bigger until recently, but now inflation is becoming more of a risk. He highlighted how challenging it is for the Fed to manage this situation, especially as consumer spending remains steady but is shifting. Meanwhile, sectors like housing and manufacturing, which are sensitive to interest rates, will need to take up the slack.
Finally, Puri talked about whether the Fed could pause rate cuts like the European Central Bank did. He thinks the Fed will keep lowering rates, but the size of future cuts will depend on upcoming labor market data.
Our Methodology
For this article, we made a list of the top 55 best-performing stocks on a year-to-date basis with a market cap of over $2 billion, as of October 1. We narrowed our list to 10 stocks that were most favored by analysts. The best hot stocks to buy right now are listed in ascending order of the average price target upside. We also mentioned the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a laptop with a Bitcoin ecosystem monitor running in the background.
Core Scientific, Inc. (NASDAQ:CORZ)
Number of Hedge Fund Holders: 53
Year-to-Date Share Price Gains: 241.86%
Average Price Target Upside: 36.05%
Core Scientific, Inc. (NASDAQ:CORZ) is a leading North American provider of digital infrastructure for Bitcoin mining and hosting services. It operates eight data centers across several states, using its own large fleet of computers to mine Bitcoin.
Most of the company’s revenue comes from self-mining, but it also offers hosting services for Bitcoin mining and high-performance computing clients. Its operations are designed to convert energy into computing power with high efficiency at scale.
The company offers premium hosting services for Bitcoin mining, which focuses on reliability and long-term success. Its customers’ miners are housed in the same data centers where they conduct their own mining operations, and it ensures aligned goals and maximizing profitability.
At its Q2 earnings call, CEO Adam Sullivan provided an overview of Core Scientific’s (NASDAQ:CORZ) progress and financial performance. He highlighted significant achievements, including the successful early delivery of a 16-megawatt data center in Austin for high-performance computing (HPC) hosting, which began generating revenue.
The company has signed HPC contracts that total 382 megawatts and are expected to yield $6.7 billion over 12 years starting in 2025. Additionally, the company completed 72 megawatts of infrastructure in Denton, Texas, and began construction on a 100-megawatt facility in Pecos.
The company recorded 1,680 Bitcoin mined in the second quarter, generating a total revenue of $141 million, with HPC hosting contributing $5.5 million. While gross profit increased by 5% to $39 million, the net loss of $805 million primarily stemmed from non-cash mark-to-market adjustments related to stock prices. Adjusted EBITDA rose by 2% to $46 million, which indicate strong cash generation from operations.
Core Scientific (NASDAQ:CORZ) plans to expand its self-mining fleet and has targeted acquiring 10,000 to 15,000 additional miners in 2024. The company’s strategy includes transitioning some of its infrastructure to HPC hosting, where it anticipates substantial revenue growth. It is optimistic about its future growth and aims to achieve a self-mining hash rate of 21.8 exahashes per second by the end of the year.
It is the 9th best hot stock to buy with an average analyst price target upside of 36.05% from current levels on October 1.
Overall CORZ ranks 9th on our list of the hot stocks to buy. While we acknowledge the potential of CORZ as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CORZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
