Key Highlights
- Shares of Core Scientific climbed 4.7% in premarket hours following the announcement of a landmark AMD collaboration
- The chip giant has locked in over 500 megawatts of hosting capacity beginning in 2027, with expansion potential to 2.5 gigawatts
- Fifteen-year contracts underpin the partnership, representing over $14 billion in potential base revenue
- Core Scientific’s Q2 results showed a per-share loss of $3.32, significantly worse than the anticipated 6-cent deficit, though revenue exceeded expectations at $164.2 million versus the $144.8 million forecast
- As part of the agreement, AMD will obtain warrants priced at market value to acquire Core Scientific shares
Shares of Core Scientific surged 4.7% to $21.78 during premarket hours Tuesday following the unveiling of a strategic data center alliance with AMD valued at over $14 billion in potential revenue over the contract term.
This rally followed Monday’s session where the stock declined 8.8%, closing at $20.80.
Meanwhile, AMD shares experienced downward pressure, dropping 4.6% to $472 during premarket activity, reflecting broader weakness across semiconductor stocks.
The company disclosed its second-quarter financial results Tuesday morning. The per-share loss reached $3.32, substantially exceeding both last year’s 4-cent deficit and analyst projections calling for a 6-cent loss.
However, the top-line performance painted a brighter picture. Revenue registered $164.2 million, representing a 109% year-over-year increase and surpassing the FactSet consensus estimate of $144.8 million.
Market attention, however, centered predominantly on the AMD collaboration.
The chip manufacturer has reserved over 500 megawatts of Core Scientific’s infrastructure beginning in 2027. The framework includes provisions to scale operations up to 2.5 gigawatts to accommodate AMD’s artificial intelligence offerings.
Partnership Structure and Terms
This collaboration extends beyond simple capacity allocation. Core Scientific and AMD plan to coordinate on infrastructure architecture and the rollout of AMD’s graphics processors, central processing units, and software platforms.
Five separate sites anchor the arrangement through 15-year commitments, collectively representing approximately 530 megawatts. This foundation supports the projected $14 billion-plus baseline revenue calculation.
The agreement grants AMD warrants to purchase Core Scientific equity at market rates, contingent upon meeting specific commercial milestones. Additional financial details remained undisclosed.
According to Mathew Hein, AMD’s chief strategy officer for corporate development, the collaboration enables “model builders, cloud providers and enterprises accelerate AI adoption while strengthening the AMD ecosystem.”
Pivoting from Crypto to Artificial Intelligence
Core Scientific has been transitioning its business model from cryptocurrency mining operations toward artificial intelligence and high-performance computing infrastructure hosting. This agreement represents a significant milestone in that strategic shift.
Power availability, physical space, and data center capacity have become increasingly valuable commodities as cloud service providers and large enterprises invest heavily in AI capabilities. Core Scientific aims to capitalize on this emerging market dynamic.
AMD specifically referenced Core Scientific’s collection of AI-optimized facilities as a primary motivation for the partnership, providing AMD clients with deployment options for large-scale artificial intelligence implementations.
The extended 15-year duration and the provision allowing expansion to 2.5 gigawatts indicate both companies view this as a strategic, long-term relationship.
Core Scientific shares ended Monday’s trading session at $20.80 before advancing in premarket activity following the partnership disclosure.
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