CoreWeave's $9 Billion Power Play for Core Scientific

AI infrastructure leader CoreWeave, Inc. (NASDAQ: CRWV) has announced a $9.0 billion, all-stock deal to buy data center operator Core Scientific, Inc. (NASDAQ: CORZ).

The market reacted with immediate skepticism, and CoreWeave’s stock price declined following the news. Investors were clearly concerned that their ownership would be diluted or spread across more shares and that merging the two companies would be difficult.

While the market’s short-term concerns are understandable, they miss the bigger picture. This deal is a bold, strategic move by CoreWeave to control the most critical resource for the future of artificial intelligence (AI): power. For investors with a long-term view, this acquisition makes sense.

From Renter to Owner: Securing the AI Fuel Line

The AI industry runs on electricity. High-performance computer chips, such as the NVIDIA GB200 Blackwell hardware used by CoreWeave, are incredibly power-hungry. This has sparked a global race for data center space, and more importantly, the energy required to operate them. Instead of staying in that race, CoreWeave has decided to own the racetrack.

By acquiring Core Scientific, CoreWeave gains direct control over a substantial portfolio of data centers, featuring approximately 1.3 gigawatts (GW) of power already in place. It also secures access to another 1 GW or more for future growth.

This is a game-changer. 

It moves CoreWeave from being just another customer renting space to an owner with a secure power supply, giving it a major advantage over competitors. In this acquisition, the company gains not only Core Scientific's facilities but also its experienced talent. Core Scientific's team brings over 150 years of combined expertise in data center construction and management, significantly mitigating the risks associated with expanding into this new role.

The Price of Power: How the Deal Pays for Itself

While issuing new stock spreads ownership out, this deal's financial benefits are clear and powerful. CoreWeave is using its valuable stock to purchase physical assets that are difficult to build and essential for growth. This deal converts a substantial future bill into an asset that CoreWeave now owns.

The company expects the acquisition to deliver significant financial wins over the long run:

• It will eliminate the need to pay over $10 billion in future data center lease costs.
• It is projected to create $500 million in annual cost savings by the end of 2027.

CoreWeave was already Core Scientific’s biggest customer. By purchasing the company, CoreWeave is essentially paying itself instead of a landlord. This move is designed to create a more profitable and predictable business model for years to come.

The Hidden Value in Core Scientific's Business

Any concern that CoreWeave is acquiring a volatile Bitcoin mining company overlooks a key fact: Core Scientific is already undergoing a business transformation. The company has been actively converting its older facilities into modern, high-density data centers, which are ideal for AI customers.

Its work at its Denton, Texas, facility shows this transition plan is already in motion and working.

The value of this shift is evident in Core Scientific's financial results. For the first quarter of 2025, its old crypto-mining business had a gross margin of only 9%.

However, its new high-density colocation and digital assets business, which CoreWeave is most interested in, showed a much stronger gross margin of 46%.

This shows that CoreWeave is limiting its risk by acquiring a partner to accelerate a business line that is already proving to be more profitable.

A Long-Term Opportunity in a Short-Term Dip?

For those willing to look past the market's initial uncertainty, this acquisition strengthens CoreWeave's position as a leader in the AI industry. The short-term stock drop may even present a compelling entry point for long-term investors who believe in the company’s vision.

Of course, the success of the deal will depend on how well it is managed. Investors should keep an eye on a few key areas in the company’s upcoming quarterly reports:

• Conversion Speed: Look for updates on how quickly the company is turning old mining sites into modern AI data centers.
• Company Margins: Watch for improvements in CoreWeave’s overall operating margins as the cost savings from the deal begin to take effect.
• Savings Targets: Listen for confirmation from management that the company is on track to hit its goal of $500 million in annual savings.

This is a bold move by CoreWeave. In securing its power infrastructure, the company is building a foundation for future growth that few of its competitors will be able to match.

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Micron Insiders Sell But Investors Should Buy, Buy, Buy

Micron (NASDAQ: MU) insiders sold in Q2 2025 and continued the trend in Q3, but investors shouldn’t. The insider selling coincides with the onset of a robust rebound in share prices, and share-based compensation is in play. Sellers include numerous directors, the CEO, and several EVPs, all of whom are eligible. The takeaway is that these executives are taking some money off the table but are raising no red flags by doing so. 

Although the four-quarter high in activity is alarming, insiders hold a slim 0.3% stake in the stock, which provides little to no headwind. Other factors, including results, outlook, institutional buying, and analyst recommendations, offset their activity. 

The stock price outlook centers on the latest results and guidance update. They affirm that the AI boom is spilling over into NVIDIA-adjacent markets due to the accelerating build-out of AI infrastructure. Results included top- and bottom-line outperformance, as well as accelerating growth driven by the data center and HBM markets. HBM memory, specifically that provided by Micron, is critical to the development and applications of advanced AI.

The guidance is the driving force for Micron’s stock market in July. The company’s guidance echoes that of NVIDIA, including significant strength in addition to the FQ3 strength and a high probability of being cautious. Micron’s business is being driven by demand for NVIDIA (NASDAQ: NVDA) GPUs and Advanced Micro Devices (NASDAQ: AMD), which is seen as on the cusp of a significant inflection.

Its GPUs are generally viewed as better for advanced AI due to their favorable power efficiency, superior memory capacity, and total cost of operations—good news for memory supplier Micron. Additionally, normalization in legacy markets is also supporting the outlook, with the last holdouts expected to revert to growth by the end of the calendar year. 

Institutions Drive Micron Rebound, Analysts Lead Market

Micron’s stock price rebound began in early April, shortly after the release of its FQ2 results, driven in large part by the institutions. The institutions took advantage of the tariff-induced sale and netted nearly two shares for each one sold since then.

They own approximately 80% of the stock, providing a solid support base with their numbers and a tailwind for price action through their activity. The tailwind is being amplified by analysts who are lifting their ratings and price targets in the wake of the FQ3 release. 

MarketBeat tracked 19 revisions from 24 analysts in June and early July. All were increases, and 100% included a price target revision. The consensus for the new targets is roughly $157, a 25% increase from the $120 level, and the revision trend is likely to continue positively this year.

Wells Fargo says details from the report, including the fact that a single customer accounted for 16% of year-to-date revenue (above their forecast), suggest the upcoming report will be significantly above their initial targets, topping them by more than 50%. 

Micron Uptrend Has Room to Run in 2025

Micron’s upswing has been robust but is likely not over. The market is pulling back in early July, but the move aligns with an uptrending market and remains above critical support targets. Those are near the $115 level and the top of a trading range established in 2024. 

Among the indicators of strength is the MACD. It is convergent with the 2025 highs, showing an extreme peak and the strongest momentum on record. The market for MU stock can pull back in this scenario, but is far more likely to extend the rally and set a new all-time high.

Assuming the market stays above the critical support level, it should be able to regroup quickly and extend the rally, potentially retesting the all-time highs before the year’s end.

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ExxonMobil: Limited Risk and Lots of Reward With This Oil Play

ExxonMobil (NYSE: XOM) faces risks like any other company, but those risks are relatively limited compared to its peers.

Over the past few years, the company's efforts have included repositioning, ramping up production, and improving operational quality, which have driven a robust cash flow despite the decline in oil prices.

The cash flow enables a solid capital return and growth, with no signs of slowing. The company’s goal is to launch at least ten new projects, including critical locations in the Permian, Guyana, and Indonesia, which are forecasted to add $3 billion to the bottom line this year, with further growth expected next year. 

Analysts' Sentiment Firms Ahead of Arbitration Announcement 

ExxonMobil has a catalyst in an upcoming arbitration announcement that could significantly boost its stock price, regardless of the outcome. The arbitrator has decided the claims regarding the Hess (NYSE: HES)/Chevron (NYSE: CVX) merger and will announce the decision soon. The outcome will either allow the Hess/Chevron merger to advance, have little impact on Exxon, or not, which opens the door to another growth opportunity.

Exxon’s claim is for the right of first refusal; if the decision is in its favor, the company can add another substantial block to its Guyana portfolio, further increasing oil production. 

The analysts' sentiment trends reflect a high and rising level of confidence in this company. The trends include increased coverage compared to 2024, firming sentiment with a consensus rating pegged at Moderate Buy, and a steady price target forecasting a 10% upside at the midpoint. The $125.50 target is a significant technical level, aligning with the top of the existing trading range and likely serving as a pivot point for this market. 

The Q2 earnings report is another likely catalyst to drive this stock higher. Analysts are forecasting a substantial 14% decline in revenue and tighter margins, despite resilient economic data and consumer habits. Labor and spending data reflect year-over-year gains, a driving force behind U.S. economic activity, positioning the company to outperform its estimates.

ExxonMobil’s Capital Return Is Safe for 2025

ExxonMobil broke industry trend when it affirmed the pace of buybacks would continue in 2025. Others, like Chevron, reduced or suspended their buybacks in response to tightening margins and cash flow.

There is some risk for ExxonMobil investors, as Q1 capital returns outpaced net income; however, the shortfall is offset by sufficient cash flow and free cash flow, which enable the maintenance of balance sheet health while capital is returned to shareholders and new projects are developed. 

The capital return is substantial, including the dividend, which yields about 3.5% at mid-year. The buybacks are also considerable, equalling roughly 1% of the market cap with the stock trading near $110.

The primary risk is that the pace of buybacks will slow, but that isn’t expected until the next fiscal year, if at all.

Regardless of the pace, buybacks positively influence shareholder value and will help leverage the stock price to new highs over time.

Institutional Support for ExxonMobil Is Strong in 2025

The institutional trends indicate that support for ExxonMobil is expected to remain strong in 2025. The data reported by MarketBeat indicates that ownership exceeds 60% and has been increasing on a quarterly basis this year. This is a tailwind for the market that can help it rise over the long term and diminish the impact of pullbacks when they occur. 

The chart action reveals the cumulative support of analysts and institutions. The price has trended sideways within a narrow range since 2022, showing consistent support at the $110 level, sufficient for the long-term EMAs to catch up with it. The long-term EMAs are a critical factor that is likely to push the price action higher over time. Resistance at the range’s top could be tested before the end of the year. 

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