Core Scientific|14B AMD Deal, Stock Still Fell

The $14 Billion Handshake

Core Scientific just signed a fifteen-year lease agreement with AMD worth more than fourteen billion dollars in potential base revenue. The deal covers five sites and about five hundred thirty megawatts of AI data center capacity, with an option to expand to two and a half gigawatts by the end of 2028.

The market's first reaction was enthusiastic. Core Scientific shares jumped as much as eleven point two percent in premarket trading on the news. AMD also handed over warrants to buy up to thirty million Core Scientific shares at twenty-three dollars and forty-seven cents each, a price above where the stock was trading.

But the premarket pop did not hold. By the close, Core Scientific shares had fallen more than four percent, even as the AMD deal was announced the same morning. The stock that opened the day on a fourteen-billion-dollar catalyst still finished it lower.

The Loss Behind the Deal

The same earnings report that carried the AMD headline also disclosed a net loss of one point one five billion dollars for the second quarter, more than triple the prior quarter's three hundred forty-seven million dollar loss. Management attributed this almost entirely to a non-cash accounting charge tied to the rising value of the AMD warrants themselves.

This is the paradox sitting inside Core Scientific's earnings. The very warrants AMD received as part of the infrastructure deal are what drove the headline loss, because their value rises with the stock price the deal itself was supposed to lift. A bullish catalyst produced a bearish accounting number in the same filing.

Underneath that headline loss, the operating business told a different story. Second-quarter revenue more than doubled to one hundred sixty-four point two million dollars from seventy-eight point six million a year earlier, with colocation revenue surging to one hundred thirty-six point seven million dollars from just ten point six million in the same period last year. The loss is a warrant valuation artifact, not a sign the underlying colocation business is shrinking.

What the Warrants Really Signal

Building out the AMD capacity is not cheap. Capital expenditures jumped to seven hundred ninety-seven point four million dollars this quarter from three hundred eighty-nine point two million in the first quarter, and construction costs run eleven to twelve million dollars per megawatt. Needham and Company estimates the AMD build-out alone will require roughly six billion dollars, financed largely through project-level bonds.

Core Scientific enters this build-out with about one point eight billion dollars in cash and equivalents, and Needham kept its Buy rating with a twenty-nine dollar price target after the deal, arguing the lease economics imply an eighty-two to eighty-eight percent operating margin once capacity is delivered. Initial sites in Pecos, Texas and Auburn, Alabama are scheduled to go live in the first half of 2027.

The fourteen-billion-dollar figure is a ceiling on potential revenue, not a guarantee of it. It depends on Core Scientific actually delivering five hundred thirty megawatts of built capacity on schedule starting in 2027, and on AMD choosing to exercise its option on the remaining nearly two gigawatts. Until construction milestones land, the warrant-driven loss and the premarket pop are both reactions to a promise, not yet to delivered infrastructure.