Core Scientific Posts $580M Q1 Profit Amid Shift Toward AI and HPC, But Revenue Misses Expectations

Core Scientific Reports Strong Q1 Profit, but Revenue Declines Amid Strategic Shift to AI Hosting

Bitcoin mining giant Core Scientific has reported a robust start to 2025, more than doubling its net income from a year ago and positioning itself as a key player in the booming high-performance computing (HPC) and artificial intelligence (AI) infrastructure market. However, the company fell short of Wall Street’s revenue expectations, highlighting growing pains in its transition strategy.

The firm released its first-quarter 2025 earnings on May 7, revealing a net income of $580 million, up from $210 million in Q1 2024. Despite the strong profitability, total revenue came in at $79.5 million, an 8.11% miss from Zacks analysts’ estimates, and a significant drop from the $179.3 million in Q1 revenue last year.

Source: Core Scientific

The revenue shortfall was primarily attributed to a decline in Bitcoin mining output, driven by April’s halving event, which cut the block reward from 6.25 BTC to 3.125 BTC. In response, Core Scientific has aggressively begun shifting its focus toward HPC hosting and AI infrastructure, aiming to diversify revenue and mitigate the cyclicality of Bitcoin mining.

Revenue Breakdown and the Impact of the Halving

According to the company’s earnings report, Core Scientific generated:

• $67.2 million from self-mining

• $3.8 million from hosted mining

• $8.6 million from colocation services, formerly classified as high-performance computing (HPC) hosting

The Bitcoin halving, which occurred on April 20, 2024, drastically reduced miner earnings per block, squeezing margins across the industry. Core Scientific noted that while mining output and rewards dropped, the financial impact was partially offset by a 74% increase in Bitcoin’s average market price and a 33% reduction in power costs—thanks to falling energy rates and optimized usage.

Despite the pressure on its mining business, the company’s colocation revenue—largely tied to HPC hosting—continued to grow, reflecting an early payoff from its pivot toward AI and data center services.

$1.2 Billion Deal with CoreWeave Sets the Stage for Future Growth

A major component of Core Scientific’s future strategy revolves around HPC. In February 2025, the company announced a $1.2 billion deal with AI startup CoreWeave to expand its data center infrastructure, repurposing its mining assets for AI computing and colocation services.

CEO Adam Sullivan described the first quarter as an “inflection point” for the company, stating that Core Scientific is now “at the center of one of the most important shifts in modern computing,” referring to the surging demand for AI and high-performance data infrastructure.

The company expects to enter 2026 with annualized colocation revenue of $360 million, signaling a major revenue rebalancing from pure Bitcoin mining to diversified digital infrastructure services.

Core Scientific’s stock has jumped slightly after the bell, after dropping during the regular session. Source: Google Finance 

Stock Performance and Market Outlook

Shares of Core Scientific (NASDAQ: CORZ) closed down 1% at $8.90 on May 7, but rebounded more than 3% in after-hours trading to $9.24, as investors digested the company’s strategic vision and profit figures.

Industry analysts suggest that Core Scientific is well-positioned to capitalize on the growing overlap between blockchain infrastructure and AI computing, especially as it reallocates power capacity toward more stable, higher-margin services.

Bitcoin Miners Eye AI Pivot to Boost Long-Term Profitability

Core Scientific’s transition mirrors broader trends in the Bitcoin mining industry, where several firms are diversifying into AI and HPC to reduce dependency on Bitcoin’s price and halving cycles.

• VanEck reported in August 2024 that if publicly traded Bitcoin miners reallocate 20% of their power capacity to AI and HPC, they could unlock $13.9 billion in additional annual profits over the next 13 years.

• Hive Digital, Hut 8, and Iris Energy have already shifted parts of their operations toward HPC.

• TeraWulf, another mining firm, sold its Bitcoin facility stake for $92 million in October 2024, planning to reinvest in AI hosting and HPC data centers.

• Riot Platforms also appointed three new board members in February 2025, including one with deep experience in repurposing mining hardware for AI workloads.

These developments underscore a growing consensus that Bitcoin mining infrastructure is uniquely suited to be retooled for AI, given the similar requirements in cooling, power, and compute density.

Conclusion: Core Scientific Bets on the AI Boom

While Core Scientific’s revenue took a hit in Q1 2025 due to the Bitcoin halving, the company’s net income surge and HPC expansion efforts indicate a strategic pivot well underway. With the AI sector booming and institutional demand for compute power accelerating, Core Scientific is positioning itself not just as a Bitcoin miner—but as a key infrastructure provider for the future of digital computing.

If successful, this transition could provide a long-term hedge against the volatility of crypto markets, while opening up substantial new revenue streams in the AI and data center economy.