We recently published a list of Jim Cramer’s Latest Lightning Round: Top 10 Stocks. Since Core Scientific Inc (NASDAQ:CORZ) ranks 6th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC said that the market had already priced in the positive comments from the Fed Chair Jerome Powell at the Jackson Hole event in Wyoming. Cramer said some bulls might be hoping for an indication of “multiple rate cuts,” but that’s “not gonna happen.”
Cramer talked about the latest 8-day winning streak of the market which he called a “resurrection.” He said that almost “anything” during these days went up. Even the companies with “bad” results went up because investors thought they would improve once the Fed begins to cut interest rates, Cramer said.
“But that was then, this is now. Since the winning streak ended we are starting to get into what I call the buyer’s remorse phase of this move. Stocks have had a nice run based on nothing more than hope are now rolling over hard.”
Jim Cramer also pointed to the possible events in the coming months that could keep the markets depressed:
“Maybe the Fed is already too late and the economy will get real ugly or maybe traders are beginning to fear the possibility of a democratic sweep in November which could lead to higher corporate tax rate, bad for earnings. And a potential witchhunt for price gouging in the aisles of the supermarket and the drug stores.”
For this article we picked 10 stocks Jim Cramer talked about during his latest programs on CNBC. With each company we have mentioned the number of hedge fund investors. 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).
Core Scientific Inc (NASDAQ:CORZ)
Number of Hedge Fund Investors: 53
Jim Cramer said in a latest program that Core Scientific Inc (NASDAQ:CORZ) is in a “very overvalued situation” primarily because it “has never made any money.”
“It is another play on crypto. If you like crypto, buy crypto.”
Core Scientific Inc (NASDAQ:CORZ) offers digital assets mining and hosting services. The stock is gaining attention after its deals with CoreWeave, a startup backed by Nvidia. As part of the deal, Core Scientific (NASDAQ:CORZ) will deliver an additional ~112 megawatts of computing infrastructure to support the operations for CoreWeave.
Riley Securities upgraded Core Scientific (NASDAQ:CORZ) to Buy from Neutral, saying the company will be a “future leader” in high-performance computing (HPC) hosting. The firm said the latest deals with CoreWeave and “management’s deep experience in operating enterprise data centers,” is driving Core’s (CORZ) HPC expansion.
Why do companies turn to CORZ for their power needs? Nvidia’s GPUs require more than twice the power of standard CPUs, and many colocation facilities, particularly in large metro areas like Northern Virginia, aren’t equipped to meet these energy demands due to high utility demand and restrictions. This has created a need for AI-specific data centers.
Core Scientific Inc (NASDAQ:CORZ) operates 830 megawatts, with contracts covering 1,200 megawatts. As a result of the contract with CoreWeave, Core Scientific Inc (NASDAQ:CORZ) could potentially generate $6.7 billion from HPC hosting over the next 12 years, starting in the first half of 2026—equivalent to about $550 million annually.
Amid challenges in the bitcoin mining industry and increasing competition, Core Scientific Inc (NASDAQ:CORZ) is expanding into other areas like HPC. During the second quarter, the company made about 78% of its revenue from mining and the rest came from leases of hosting space to other miners and the emerging HPC business (4%).
Overall, Core Scientific Inc (NASDAQ:CORZ) ranks 6th on Insider Monkey’s list titled Jim Cramer’s Latest Lightning Round: Top 10 Stocks. While we acknowledge the potential of Core Scientific Inc (NASDAQ:CORZ), 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.
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Disclosure: None. This article is originally published at Insider Monkey.