We recently published a list of the 12 Best IPO Stocks to Buy in 2025. In this article, we are going to take a look at where Core Scientific, Inc. (NASDAQ:CORZ) stands against other best IPO stocks to buy in 2025.
On February 25, Hamilton Lane co-CEO Erik Hirsch joined ‘Closing Bell Overtime’ on CNBC to discuss the developments that currently hinder the IPO pipeline. Erik Hirsch noted that there are two competing factors at play. On one side, there is general market uncertainty, which is currently the dominant issue. While on the other side, there are positive factors: many high-quality businesses in private markets are ready for an exit. They are mature, cash flow positive, and growing. The IPO market is the logical conclusion for them, and the public markets need more new names to reduce concentration in a few technology businesses. For the public markets to be healthy, they need fresh blood.
Hirsch believes the IPO market can have a good year without relying solely on software. There is room for more software companies, but there is also interest in traditional non-tech businesses to balance market weightings. He identified sectors that could see growth, such as manufacturing, which could benefit from reshoring and reinvestment in the US. The food supply chain and healthcare are also expected to benefit from administrative changes. Regarding President Trump’s positioning on tariffs, Hirsch thinks it is more about negotiating tactics than actual tariffs. If negotiations cease and tariffs become the focus, there will likely be a market reaction. The uncertainty extends to government job cuts, with questions about the scale of reductions and where displaced workers will go. Despite some positive signs for certain sectors and businesses ready for IPOs, market uncertainty, and regulatory changes are holding back the IPO market and dealmaking. The environment of unpredictability makes it challenging for companies to pursue IPOs or M&A deals at present.
Still, the IPO market holds promise due to a strong backlog of mature and high-quality private businesses eager for public exits.
Our Methodology
We used the Finviz stock screener to compile a list of the top companies that went public in the last 2 years. We then selected 12 stocks with high analysts’ upside potential that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A young professional in a suit examining tables of data and charts on a laptop, representing the company’s sophisticated asset management services.
Core Scientific, Inc. (NASDAQ:CORZ)
Average Upside Potential as of March 21: 121.19%
Number of Hedge Fund Holders: 66
Core Scientific, Inc. (NASDAQ:CORZ) provides digital asset mining services in the US. It operates across self-mining, hosted mining, and high-performance computing (HPC). It offers infrastructure, software, and data center solutions. It facilitates blockchain transactions, hosts mining equipment, and provides essential services for the digital asset industry.
The company’s main source of growth is HPC. It signed a major 12-year deal with CoreWeave which is worth $8.7 billion. This exceeded its $500 million revenue from 2024, which mainly came from Bitcoin mining. CoreWeave is a cloud computing provider that offers GPU-accelerated computing infrastructure. By the end of 2024, Core Scientific, Inc. (NASDAQ:CORZ) had contracts for 1,300+ megawatts of power. It’s expanding its Denton facility by 70 megawatts and adding another $1.2 billion to the CoreWeave contract. It plans to have 250 megawatts online by the end of 2024 and 590 megawatts by early 2027.
The company is working to get more HPC customers with an aim to have CoreWeave make up less than 50% of its business by 2028. It also plans to add 300 megawatts of capacity at its current locations and another 400 megawatts at new sites by 2027. In Q4 2024, it made $8.5 million from HPC hosting.
Overall, CORZ ranks 2nd on our list of the best IPO stocks to buy in 2025. While we acknowledge the growth potential of CORZ, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. 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.
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Disclosure: None. This article is originally published at Insider Monkey.