Core Scientific targets Bitcoin mining exit as colocation reaches 92%

By Sophie Lindqvist

What has already changed?

Core Scientific generated $215.4 million of its $232.9 million in third-quarter revenue from colocation, about 92%, and set a year-end 2026 target to exit Bitcoin mining. Core Scientific (NASDAQ:CORZ) reported the results on November 5, 2026. CEO Adam Sullivan said on the earnings call: “We expect to complete our exit from Bitcoin mining by year-end.”

CFO Jim Nygaard said Core Scientific should enter 2027 as a “pure-play colocation provider,” meaning it will rent data-center space and power to AI customers. That definition makes the company an infrastructure landlord rather than an operator of its own mining fleet.

24/7 Wall St. framed the move as a shift from price-sensitive Bitcoin mining toward contracted data-center revenue. The reported mix means the economic exit is already well advanced, even if physical sites remain.

What did the stock do?

24/7 Wall St. reported that Core Scientific shares fell 10.39% on November 4 and 10.82% on November 5. They closed November 5 at $11.38 after touching a one-year intraday low of $10.59. On November 6, they rose 3.34% to $11.76.

24/7 Wall St. valued the company at $3.78 billion at that price. The share price remains far below its one-year high of $30.46. 24/7 Wall St.’s read-through is straightforward: valuation now depends more on contracted AI capacity than on Bitcoin output.

Is the Bitcoin exit actually locked in?

Management put the year-end deadline on the earnings call, which makes it a statement of intent. The written release is narrower. It says only that Core Scientific will repurpose remaining mining sites for colocation as circumstances allow.

The third-quarter mix puts the transition in concrete numbers. Colocation supplied $215.4 million, or about 92% of $232.9 million in total revenue; 24/7 Wall St. calculated that share from 83.2% in the second quarter and 18.4% a year earlier. Self-mining revenue fell to $12.3 million from $57.4 million.

Core Scientific has crossed the economic threshold; the remaining question is physical completion. Management still needs to retire or repurpose the mining sites without missing the delivery schedule.

Why does leasing pay better than mining?

Bitcoin mining income rises and falls with bitcoin’s price and with network difficulty, which measures how hard it is to earn new coins. Colocation rent is fixed by contract. In practice, Core Scientific earns by renting space and power instead of issuing new coins, so its revenue follows contracts rather than crypto-market conditions.

Adjusted EBITDA reached $133.6 million, about 57% of revenue. The measure covers operating earnings before interest, taxes, depreciation and amortization. In the second quarter, adjusted EBITDA was $41.1 million, or 25% of revenue.

Core Scientific also reported $1.18 billion in net income. 24/7 Wall St. traced it to a non-cash gain on warrants linked to the company’s stock price. 24/7 Wall St. said that gain says nothing about operational profitability, while adjusted EBITDA shows the stronger underlying result.

Who is filling Core Scientific’s campuses?

24/7 Wall St. reported that every megawatt Core Scientific bills currently goes to CoreWeave (NASDAQ:CRWV). CoreWeave has signed for 590 MW, and Core Scientific bills 485 MW across five campuses. The company has another roughly 100 MW under test before transfer.

Core Scientific expects Dalton’s second phase by early 2027. The company says its billing capacity equals more than $700 million in annualized colocation revenue. Together, those contracts give Core Scientific a substantial revenue base, although one customer provides it.

CoreWeave has 3.7 GW of signed power and a $104 billion backlog. 24/7 Wall St. said Core Scientific’s lease represents only a small piece of CoreWeave’s business. CoreWeave shares rose 6.28% to $46.40 on November 6, although they remained down 47.54% over the previous month.

AMD (NASDAQ:AMD) is the next tenant, with 530 MW across five leases. Delivery starts at Pecos in the first half of 2027, with about half online that year and the rest through 2028. AMD also holds reservation rights on about 1.9 gigawatts more.

Core Scientific now has three capacity stages: signed, billing and under test. Those stages determine when contracted megawatts become revenue. AMD’s 1.9 gigawatts of reservation rights signal potential demand, not delivered capacity.

CoreWeave anchors current revenue, while AMD supplies the first visible test of diversification. Until Pecos bills, Core Scientific remains tied to one customer.

Can debt and dilution break the plan?

Sullivan set targets of $1.8 billion in annual run-rate revenue and $1.6 billion in net operating income. 24/7 Wall St. said those targets apply to roughly 1.1 GW once fully delivered, a process that runs through 2028. The model depends on completing contracted capacity on schedule.

The balance sheet adds pressure. Shareholders’ equity stood at negative $1.092 billion, while long-term debt totaled about $4.3 billion. 24/7 Wall St. called debt the main risk because shareholders take the loss first if delivery slips.

Core Scientific reported $1.74 billion of liquidity, including restricted cash, and $803.9 million of cash. Nygaard expects about $650 million from Tranche 1 warrants around their January 2027 expiration. Each exercised warrant adds shares, so that funding also enlarges the diluted share count.

Core Scientific has roughly 322 million shares outstanding, compared with about 509 million on a fully diluted basis. 24/7 Wall St. noted that warrants form part of that gap. The source framed the financing as a choice between liquidity now and a larger share count later.

What decides the next phase?

The investment case rests on Core Scientific retaining its existing tenant for several more quarters. Management guided to a double-digit sequential revenue increase in the fourth quarter. The contracts show a path from more than $700 million toward $1.8 billion in revenue.

24/7 Wall St. argued that path is worth more than Core Scientific’s $3.78 billion valuation implies. The source also warned that a delivery delay would leave shareholders exposed to the debt. Those forces make execution, rather than demand, the central issue.

Two dates will test the thesis: CoreWeave’s November 10, 2026 report and AMD’s first Pecos billing in the first half of 2027. 24/7 Wall St. says the former should confirm whether the anchor customer can keep paying; the latter will show whether diversification arrives on schedule. If Pecos slips, Core Scientific will likely depend on one tenant for longer, weakening the case for a broader customer base.