Power Analysis

Core Scientific’s & AMD Deal Decoded, APLD Earnings, GLXY & HIVE News!

• Anthony Power & Bryce McNallie • Season 1 • Episode 632

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We break down why AI colocation revenue is starting to matter more than pure Bitcoin mining for public miners, even while the whole sector trades deep red. We dig into Applied Digital’s earnings surprise, Core Scientific’s earnings details, and the new AMD deal that pushes contracted capacity into gigawatt territory. 

• Bitcoin price weakness versus miner stock drawdowns 
• Clarity Act timing and why market structure matters 
• Heat map view of miners and where value is showing up 
• Upcoming earnings calendar and what questions to ask management teams 
• Hive price target upgrade and why Paraguay matters 
• Applied Digital’s HPC AI revenue ramp and why energisation timing drives quarterly results 
• Core Scientific revenue mix, adjusted EBITDA, and how noncash warrant charges distort net income 
• Core Scientific buildout progress and how billing scales with megawatts 
• AMD 530MW partnership details and what 1.1GW contracted capacity means 
• Data center cost breakdown per megawatt and the labour plus equipment bottlenecks 
• Galaxy’s second Texas data center site and the multi-campus strategy trend 

Let us know in the comment section below what you thought of today's announcement from Core Scientific and your top pick in the space currently! 


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Welcome And Housekeeping

SPEAKER_00

Hey guys, welcome or welcome back to the channel McNally Money, the official home of power analysis. A big episode in store for you today. Core Scientific coming out with their earnings and another landmark deal, this time with AMD. We're gonna be breaking down the deal economics in addition to news out from Applied Galaxy and a nice price target update on Hive. We've got a lot to talk about before we get into it. You know the deal. Take a second, hit the like button, guys. Big help to myself and the channel. Anthony absolutely loves it. If you're not already subscribed, McNally Money, feel free to join. And let us know in the comment section below what you thought of today's announcement from Core Scientific and your top pick in the space currently. With that being said, let's get into today's video.

Bitcoin Dip And Clarity Act

SPEAKER_00

All right, guys, away we go. Tuesday afternoon. This episode is not gonna be one you want to miss. We've been talking about the anticipation heading into earnings season here. The fact we're gonna start to see some HPC AI revenues. That's exactly what we're seeing here in the case of applied and core scientific, not to mention a massive new deal with AMD. So a lot to get through before we get into the AI, Anthony. On the Bitcoin side, a little bit more weakness today. Now down in the 63.7 range. We've brought the one-month view here. You can see holding up relatively well compared to the stocks, but still nothing too crazy compared to last November.

SPEAKER_01

Yeah, we've shown the one-month chart there, which shows you know that uh slow improvement um week by week. But as you say, last um last 24 hours have seen that uh weakness drop from where it was in the 65,000 range down to sort of like mid 63,000 to 64,000 range. So um, as I say, uh don't don't focus on a day-to-day. The monthly chart there shows it's hopefully going the right direction. Maybe we can regain ground at the 66,000 and build from there, but uh Bitcoin will do what Bitcoin does, Bryce.

SPEAKER_00

Yes, it will. Now, just a quick update on Bitcoin before we get into the AI stocks clarity act. We've been hearing some rumors. I know we shared some comments from Brian Armstrong, CEO of Coinbase a few weeks back. Uh, sounds like they may be making some progress with the vote uh potentially as early as Monday, August 3rd for the next step in this saga. So that could provide uh catalyst or some potential clarity structure to the crypto markets, but again, as we say, time will tell.

SPEAKER_01

Absolutely. Um, you know, hopefully we get some news. I was under the impression we're having like a summer break. I know in the UK the the um the uh the MPs, members of parliament have 600 and I think 55 of those. They have a summer break, which normally lasts about the same period as some holidays for the schools, like six weeks long there. So it gives them a chance to recover, go on a bit of a holiday, and then get ready to do uh you know good work for the people of the United Kingdom. Um, although we are now like seventh prime minister in the last 10 years, so um trying to understand um the continuity um of having people in the office of prime minister, um, not proven to be such a great factor in the United Kingdom at the moment. But uh as I say, um, you know, uh the Clarity Act should give us some some real impetus into Bitcoin, it puts you know those root policies in place there and uh gives people a little bit more um you know expectation of what's what what would happen in the event of so um yeah looking forward to that getting approved.

SPEAKER_00

ARX uh Prime Minister Trudeau, he's a backup dancer for Katy Perry now in some of our music videos. So I guess we're in a similar situation, uh

Miner Stocks In Deep Red

SPEAKER_00

Anthony. Now moving into the stocks here, surprising to see actually another deep red day. We are in some significant value territory. I know both you and I were making some purchases today. Many of these companies, nearly 50% off their highs. We saw it just a couple weeks back. So some very interesting uh storylines here. I mentioned Core Scientific announcing a huge deal with AMD trading down on the day.

SPEAKER_01

Absolutely. I mean, when the news was announced, the share price was over $23. And you can see looking at the share price there, um, you know, totally different um positioning now, uh around about $20 and $20.35. Um, yeah, but significantly higher in earlier trading. But and that's the and we'll come on to that news story, that's a big news story, but uh you can see a sea of red um across share prices there, Galaxy, Keel, and BitDear performing um a little bit worse than the majority of shares there, all around the 8% down there, and that 52-week range now is literally uh getting closer and closer for more miners. We've probably got best part of five or six that are nearly at their 52-week lows, and the only two or three that stand out um in terms of maybe halfway between 52-week low and 52-week high are the likes of Riot, um, Hutt and Cypher. Uh, the rest of them doing uh not very good at all. And when we come on to look at the uh the heat map, uh, in terms of um market capitalization, it's always a good indicator. We talked about this yesterday there. You can see now that Hutt's gaining ground and literally um you know less than a you know about a billion dollars between them and and iron, who've held top spot for a long, long time. Heat maps look looking good from the first three periods there. The the the daily everything's down there, average of four percent down there, the five day down by fifty uh sorry, 13%, and the one-month change down by 21%. It only turns green on the year to date and the one-year change. One year change only look quite nicely still, average of 75%, but again, it's probably down to the likes of uh Hutt and Terra Wolf and Cypher, um, who roll over uh 200 and 300%, respectively, um, uh giving that uh group a higher average. Uh, there's a couple of stocks down there, more of the Bitcoin-related stocks, and and Mara's also down 34% uh on the one-year chart there. Although year today up 26%. So, um, as I say, this last few days proving to be quite a challenge. We are significantly lower than the 22nd of June, and that's just over a month ago. How far to go down? I don't know. But like you said earlier, I've been buying some stocks today. Uh, was buying some last week as well, so um, hopefully, not too much more. I still have a little bit of dry powder on the sidelines if we go a little bit lower. But uh, when we come to some of the price targets today, uh Wall Street feel probably that these these prices at the moment are providing some value across the board because the majority of these stocks are looking to use their power for high performance compute AI. And we'll talk about some of those in more detail throughout the podcast.

SPEAKER_00

We sure will, yeah. And interesting to see the spread. Bitcoin now up six percent over the one month, stocks down an average of

Earnings Dates And Hive Upgrade

SPEAKER_00

21. So a pretty decent spread on those two categories. Now, before we get into today's news and earnings, just a quick update. Riot, they've come out with their Q2 results scheduled for Wednesday, August 5th, before market opens. So that's gonna be a busy day. We'll flash on the screen here the upcoming earnings calendar, but you can see it's gonna be a very busy time around power analysis over the next two weeks. We've reached out uh in advance to each and every one of these companies. We're gonna try and have them on as closely following earnings as possible. So make sure you guys start dropping your questions in if you have anything specific for these teams. Now, you just mentioned price targets. We're gonna kick off today with Hive, a nice little upgrade here, $7.50 price target. And really no wonder when you start to think about the opportunity, both South America with Paraguay and everything they're doing in North America here.

SPEAKER_01

Yeah, it's a $7.50 price target, as you said there from Charlotte Capital. So we'll keep an eye on Hive as well.

SPEAKER_00

Yeah, looking forward to earnings from them and an update on Buzz HPC specifically moving into earnings.

Applied Digital Earnings Show AI Ramp

SPEAKER_00

First up today on the agenda, applied digital. They've come out with their Q4 and full year for 2025. And as we talked about yesterday, this is a great example of a company that's now generating meaningful revenue from the HPC AI operations and continuing to scale that growth.

SPEAKER_01

Yeah, we thought we'd cover reply today because you know what they're doing now is what we're going to see with all the companies that we talk about on a daily basis doing in subsequent earnings periods as they start to grow that power towards HPC. Remember, this earning period we're still going to see the majority of the companies really focusing on Bitcoin mining revenue with the expectation of some sort of a strategy and an update on where their power is going to be locked towards HPC moving forward. But applied are already in that position there, so we can see from their numbers what we're likely to see or the expectation like to see in earnings periods to follow. And there are a few exceptions to that, and one we'll come on to today as as they've released their results as well. But Q4 um uh numbers for for uh applied, um, earnings per share, um, in terms of uh you know what the estimate was, which was um you know a 22 cent loss, they came out with a four cent profit, so a massive turnaround from from where the uh from where Wall Street was seeing this. And if you look at the actual revenues, um 94.84 million was the estimate. They came in at 258.75 million. Now the revenue from a year to date position that grew 532 percent. Uh the revenues for the quarter itself, and this is where what we'll see happening with them with the with a lot of the companies we talk about is as they start energizing uh their power towards HPC, that's when the revenue starts really kicking in. If they only energize it at the end of a quarter, you're not going to get much of the revenue for that quarter, even if you've got so many megawatts energized, you need the full quarter of energization to see the full effect. And what we can see from applied in Q4, they have 258.7 million a quarter for revenue. That's 407% year on year. So, um, and if you look at the full year revenue, um, the full year revenue 611 million dollars now. Q4 258, that's getting towards 40%, more than 40%, nearly half the year's revenue in the last quarter. And if you look at the full year revenue from an increase uh position, that's up 167% on the previous year. So you can see the impact of that one quarter there, and what we're likely to see quarter by quarter moving forward is that revenue should significantly go. That could be getting up to 300 million per quarter and getting higher as we go. So, you know, 611 million this year, in terms of the 12 months, look at the next 12-month figure. You could be looking at maybe three times that figure as this revenue continues to go, as these contracts continue to be fulfilled, energized, and revenue starting to appear. Now, in terms of critical IT load, applied have got 1.4 gigawatts of contracted power. Remember that number, 1.4 gigawatts across their five AI factory campuses, and they have $36 billion in total contract lease revenues, $86 billion if you actually apply the renewals to these um uh contracts as well. Remember, most of the contracts that we're seeing at the moment, 10, 12, 15 years is a minimum period there, and then you're looking at maybe 10 to 15 years as extensions, and when you start adding in the multipliers, that's how you start getting from 36 to 86. Um, you know, it it's you know, when you start increasing the revenue by a factor of maybe two and a half, three, three and a half percent per annum, you start looking at big, big numbers further down the line. Now, if you look at um the fact that they've um uh the last three leases Delta Forge 1, Polaris Forge 3, and Delta Forge 2, that's $20 billion added for those three new leases, all with the same hyperscalers. That's three states in a row. That means they've got a very, very good relationship with this hyperscaler, and they've managed to sign three. Now I covered these three in a in a podcast where we did a sort of a deep dive and applied, and I remember looking at the uh revenues per megawatt, and for those three deals there with that hyperscaler, I think the average was something like 1.65 to 1.7 million dollars per megawatt. That's significantly lower than what we've seen from the latest deals from Cypher Digital from HUT and especially from TerraWolf with their latest deal, which I think was 2.35 million per megawatt. Now, remember, we said yesterday on the podcast if you're gonna get a deal with the hyperscaler, and there's only six or seven of them around there, so it's gonna be one of the big names out there, that will open doors for you in terms of the ability to raise uh capital to deliver these contracts. You're gonna get banks falling over themselves to try and give you money, and they're going to be offering you money at sort of low, maybe the low six percent range there in terms of interest rates. So, having a hyperscaler, don't just look at the revenue costs that are coming through, also take into account the amount you're going to save in capital costs. Because believe you me, you know, revenue is one side, but how much you spend on these leases is exactly the other side that you need to look at as well. Because you know, these companies have said on their updates that they're going to bring in significant percentage margins, and you want to make sure that um, you know, you're not just focused on the revenues. I mean, you know, we saw the latest deal from Terra Wolf there, 2.35 million per megawatt, phenomenal deal, 19 billion dollar deal for that last 401 megawatt um compute deal uh signed. And you know, Patrick came on the podcast and he broke it all down for us. He said, you know, we're gonna we're gonna use some of the ATM, but we're gonna also go out there and we're gonna be able to borrow, and the interest rates we're gonna get are going to be sort of you know fairly good. And I think his weight average cost of capital is probably about 11% in terms of the two elements there, and the revenues coming through is gonna give him you know high team percentages, maybe 18, 19. So it gives you a very, very healthy margin in between that, what the company can make year after year after year after year, and so these are all about having you know repeat uh contracts going forward. Now, the other good thing about uh applied is you look at the balance sheet itself, 4.2 billion dollars cash on the balance sheet against $5 billion of debt. Well, of course they've got five billion dollars, they've got 1.4 gigawatts of contracted critical IT. You've got to build these sites for your clients, you know, you're gonna spend significantly more than that, so that debt figure will continue to rise and they'll have to service that debt, but at some point in time they'll have to either convert that debt to shares or they'll or they'll have to just you know, it could be on the on a sort of like a payback through the notes, and they'll be exercised at uh you know, maybe five, six years in advance there, and they'll build up the necessary, you know, reserves to cover those um expectations as and when, and when they do that, then you know you have sites then that are effectively all the debt's been covered, and you'll really then into sort of like growing your margins. Remember, we've also showed the NVIDIA uh earnings and how much different that looks compared to these companies. Nvidia have been growing for years and years and years, and now they're at the position where they're earning hundreds of billions of dollars of profit every year. There's no losses there, and the balance sheet is extremely healthy, but it takes time to do that. When you're growing, you're spending all your money to grow and not necessarily getting the level of revenues in straight away. But you know, four, five, six years down the line, when those buildings are you know depreciated and you're bringing in those revenues, then the then the the these companies will will start to turn in terms of strength of balance sheets and you know um also size of company as they continue to deliver these big contracts.

SPEAKER_00

Yeah, and that's really the flywheel that so many of these CEOs have referred to, uh self-financing, which is gonna be phenomenal. We have a story a little bit later about a self-finance new site for Galaxy. Now, speaking of revenue and costs, this is an

Core Scientific Earnings And Noncash Charges

SPEAKER_00

interesting one. Core Scientific came out with earnings as well this morning. This is kind of our first insight to how these deals are gonna actually look in practicality. Yesterday on the channel, we said we estimated about 400 megawatts of critical IT would be up and running by the end of Q2. I think we were within a few megawatts of that, Anthony. I'll let you walk through the numbers first, then we'll get into the AMD deal, which was another phenomenal catalyst or update from Core Scientific.

SPEAKER_01

Yeah, the good thing about these companies now is obviously they're showing these breakdowns of the various types of revenue. And for Core Scientific, they have three types of revenue in their income statement. Uh, they have the co-location revenue there, that was 136.669 million dollars there. They have the digital asset self-mining revenue, which is just over $21.5 million, and they have $6 million of digital asset hosted mining revenue from customers. So remember, as well as mining their self-mining, they're also hosting as well at the moment. That gives them a total of $164.2 million there, which when you compare to the same time uh in 2025, um, is a massive increase. It was only 78 million there. And if you look at the six-month position from where we are uh for this for the for this current uh six months of this year, uh total revenue is about 280 million. So you can see that revenues are growing quite nicely. The digital asset um revenue um actually um isn't isn't growing uh because they're reducing their hash rate, but the co-location revenue um is certainly growing, and you can see um you know that's that's grown from about uh 70 million uh the previous uh quarter to this 137 million. And as we see from from from some of the slides that we're going to show you, this will start in the same way it has for applied, start to ramp up because now we're at a position um at the end of this uh quarter, 390 megawatts was started to be energized. So that revenue for 300 will reflect every day going forward, and as they start adding more megawatts to get close to that 590 for the deal that they have, you'll see that the revenues going forward, but you know, it's only when they're energized and installed that you start seeing the full effect of that. So we're in a sort of like these few earnings periods as they're building these sites, you're putting in a lot of costs into building these sites, and the revenues won't start coming until you physically energize and see a full period of energization. Now that's the that's the revenues. Uh the costs themselves, uh, there were some significant costs, but a lot of the significant costs were actually non-cash costs. I mean, they do have a lot of uh warrants outstanding from um just prior or just after the um chapter 11 when they came out. Uh so the they have these warrants, and these warrants um have a value, and you know, on the on the uh income statement they're required to show the change in the fair value of the warrants over the period. Um, and the change in fair value of these warrants were over one billion dollars. So you can see there from the table, you know, the total loss for the company 1.155 billion. Don't start running for the hills quite yet. Some of these are big non-cash cost items, and we'll go through a few of them just to show. Actually, it wasn't as bad as as it looks at first glance. I go down the costs that are in front of me now, and you know, we had about 10 million just for the loss in value of Bitcoin. That's a non-cash cost, 10 million dollars there, 1.1 billion and 50 million uh dollars in terms of that uh that that write down of the warrants. Then we've got um um a loss on on remeasurement of assets held for sale of about 20 million dollars. Then we've got the loss on contract termination. Now, for those that you remember, um before we started going through the process of of using power for all this HPC, um, Core Scientific will look to upgrade its machines and its and its mining sites, and they had a deal with Block, and I think it was for about 15 or chips to the value of about 15x a hash. That contract hasn't uh materialized because the company now going in a totally different direction. You don't want to bring more mining machines when you're reducing your mining business to make way for these um for these for these uh HPC AI uh strategies to be in place, and a great example of that is that me and you went to the flagship mining site back in June 2024 where there was 150 megawatts dedicated to Bitcoin mining, and today there is now 260 megawatts dedicated to HPC, no longer any mining at that site there. So you can see they've really uh come down their Bitcoin mining, they didn't need in the end those chips. The the cost of that loss on termination is effectively 42 million dollars, and also in their cost, there is a cost for co location organizational and site startup cost of about 27 million. So when we look at the adjusted um EBIT DAR figure, that's a positive figure of 41.1 million. And the easiest way to look at that there is if we just take the cash costs elements of the uh income statement and look at what's coming in and what's going out, that should be the balance there. You know, predominantly you're allowed to take away any one-off charges, so any of the costs in their statement that won't be reoccurring, that's allowed to be taken away before you get to that figure there. But definitely things like the fair value of warrants won't be there, stock compensation won't be there, depreciation amortization won't be there, all those regular non-cash costs won't be included, which shows from a business point of view that you know Core Scientific is certainly managing to meet its requirements, it's getting enough revenue in to pay the bills as and when as and when they come along. I mean, you're not having to pay the bills on a sort of you know, on a non-cash uh non-cash, not you know, a paper uh loss effectively. And just what you know, and before before we just look at a couple of other elements there, if you look at that adjusted EBIT DAR figure of 41.1 million and compare that to the applied adjusted EBIT DAR, and remember they've got 1.4 gigawatts of um HPC energized, uh, very, very similar numbers. So you could say from the business point of view, both companies sort of delivering very similar figure from an adjusted E-bit DAR position there. The final thing to say is you know, the great thing about uh the contract that they have at the moment is the fact that we reiterated yesterday, core we've paid that six billion dollars in terms of the refurbishment cost of all the sites, bar the last site, I think about 70 megawatts. Uh, the rest of those sites were in the contract there, and you know, core core scientific are paying a small amount back to cover some of those costs in the first two years of the contract there. So, you know, again, when you look at these contracts, um, you know, you're not seeing, you know, light for light. There are reasons why you know Core Scientific does have a very strong healthy deal, and we were sat with 40 analysts when they signed that first deal. All of them were saying what such a good deal is, and as we got more and more information out, we've just seen how good a deal that is when you start looking and comparing it to some of the deals that we see. So it's not always about the top line figure, you've got to remember what else is incurred in there. And so, as I say, do your due diligence, don't just think because one company's come out and said it's two or three billion per megawatt. That's got to be the be-all and end all. There are far more to it than that. Go through the numbers and come out with a net position and see what you look like then, and then do a comparison. You may be a little bit further close to where you need to be before you make decisions on buying stocks in this space.

SPEAKER_00

Yeah, and that's why I thought that comparison uh between the two earnings adjusted EBITDA is so interesting, looking at the size of the critical IT. Uh, now we've got a few slides in the new investor presentation here talking about the specific deals. We'll go through the core weave one first. Two slides here, Anthony. The first showing uh actually a progress update or completion update for the sites. This is very similar to what we talked about yesterday, but giving us some more clarity there. And then I wanted to get your thoughts on the ramp of the co-location megawatts compared to revenue because it's really exactly what you were talking about there. This is a gradual process, but once they get those full contracts deployed, it's meaningful revenue.

SPEAKER_01

Yeah, this first slide's a great slide, nearing full completion of the core we've built out there. Three sites already completed, already billing for those sites there. The Denton facility, their flagship site, 260 megawatts. The states at the moment substantially complete. What are they billing at the moment? They're billing the full 260, so that should really also have potentially a very much a green tick in there. The only site where they are still physically working to build out there is the Dalton site in Georgia. That's 175 megawatts there, and they are billing 30 megawatts at the moment, so that's about 145 megawatts to complete. Now we do know the majority of that is going to be completed this year, and that will leave a small amount, about 40 megawatts to be complete in the early part of 2026. So, as we said yesterday, we weren't sure 425 to 450. We're now seeing 430. I think it's 439 in terms of total megawatts as at today, as at the end of June, it was it was 390. So you can see they've grown nearly 50 megawatts just in the space of a month and and a month or less than a month since that date, there. So rapidly completing these here. Now you mentioned also the fact that uh you can see the slide there that shows you that growth in megawatts um and also the growth in in billing as well, and we'll continue to see that rise um in correlation as they as they hit each quarter. So when we see the next one now, we're the next quarter, we're gonna have 395 megawatts of revenue coming in for every day, and we're gonna see any uptick from that 395 day of revenue coming in from the day it gets energized. So I expect to see revenue significantly rise um uh there because as you can see, you know, from the previous quarter, 225 megawatts. You see the impact that that that that had on the current quarter, and as you see that 395 now, you'll see an equally big step up for quarter three in 2026 in sort of three months' time when they make the same announcement there. That $136 uh million dollars in fees for the for that for the quarter will probably be closer to 200 million fees, and as we've stated before, once they start um building in um you know further contracts, that revenue is going to like applied revenue is going to significantly rise uh quicker than the market can sort of keep up because I'm still shocked that the market was so far out on their estimates and what actually happened. When you have a lot of the information available for these contracts, a lot of them are very transparent and you should be able to work out a lot more closely than they did on that particular deal.

SPEAKER_00

Yeah, and a lot of these banks put a lot of risk into these uh estimates, especially for these initial contracts. So the fact that they're delivering, we're starting to see the revenue growth. That's when a lot of the big institutions, the big banks start to come into these names.

AMD Deal Adds 530 Megawatts

SPEAKER_00

Now, you mentioned applied 1.4 gigawatts of critical leased capacity. Core Scientific is now up at 1.1, and that's because of a second big announcement today, a massive deal with AMD 530 megawatts. I'll let you walk through the deal itself, Anthony, and then what you think this means for Core Weave now signing a second major tenant.

SPEAKER_01

Yeah, I mean that puts them sort of like in the sort of the top bracket now. When we talk about these the companies on a daily basis, we've looked at uh obviously core scientific, that was the biggest deal at the start, 590 megawatts. It took you know, other companies, a number of deals to get close to that. Now we saw a couple go past it. We saw Hutt sign a second deal at Beacon Hill, and that's took them over 900 megawatts of compute power. We also saw uh TerraWolf sign a 401 megawatt deal, which took their total compute to over 900 megawatts. Core Scientific announced today, fortunately, it's on the day of their earnings update, that they've signed another 530 megawatts, taking their total lease um uh customer power capacity to 1.1 uh gigawatts. And you know, um, you know, in terms of what does that look like from a revenue perspective, that's about 14 billion dollars um of infrastructure partnership between the likes of Core Science and AMD. Um, and and you know, the deal aims to secure up to 2.5 gigawatts of US data capacity for AMD AI solutions with more than 500 megawatts available from 2027 and room to scale to 2.5 gigawatts in total. Uh, they'll be using the uh AMD instinct GPUs, um epyc CPUs, and the ROC M software across the course facilities, which will help model builders, cloud providers, and enterprises um deploying faster AI and at scale. And AMD will also receive market-priced warrants for the course uh scientific stock. Um, so again, you can see this sort of like partnering arrangement, like we've seen with other companies, but with regards to warrants, they'll probably have to pay you know for the warrants that are a price at today's price, maybe, um, and and have the benefits of having those warrants as they see the company's uh stock price grow and then give give AMD a bet a benefit for exercising those warrants in the future. Um, but uh a phenomenal deal. I did hear a question um this morning uh saying when would the 530 megawatts become available? And uh as the announcement says there, and I think Adam also reiterated, I think he's looking at more than 250 megawatts this year and 250 megawatts next year. That's you know, that's that's the way you know, half this year, half next year, that's the way they're looking at achieving this deal. And then with the you know, the intention then to scale that 2.5 gigawatts of power itself.

SPEAKER_00

Yeah, some pretty big numbers. We're starting to talk here now. As we start to look through this new investor presentation, you can see a great breakdown of that gigawatt plus current contracted capacity, but that's not all they have in terms of pipeline here. They've got additional grid power applications and those load studies behind the meter expansions at both their Picos and Muskogee site.

SPEAKER_01

Yeah, it's a great another great slide. It's great presentation packed today. We don't always see that, but they've obviously done their homework and got this out there, you know, and good to get it out from a time perspective because we said earlier in podcasts previous to this one that you know the earnings season's not going to be great for any of the miners, and the exception could be uh core scientific, but you know, when they've still got those warrants out there from you know from from when they came after chapter 11 there. Um, I remember I've I sold my warrants a bit earlier when I got a decent price, and many people have kept hold of them. So the thing is those warrants are on the balance, they do have a change in value, and that affects the income statement. So the vast majority of their earnings today is really about the warrants and not really about what it should be, highlighting that HPC revenue which we were talking about yesterday. Now, this slide tells us what's going to be happening over the next few years. We can see the 590s. We've talked about that, that that's all coming online and all be completed by the early next year. They've already highlighted where the 530 megawatts of lease power and that's available power. This isn't about waiting for approvals, that's available now. And if you look down the sites there, you'll notice there's a couple of similar sites that that uh also have core weave uh situated in as well. So Dalton um in Georgia, um, it will be home to not just core we but to AMD uh and the Neo Cloud partner as well. And um also on that uh chart there, Muskogee, uh Oklahoma, 70 megawatts for the core weave deal and 10 82 megawatts for the AMD and Neo Cloud deal. There they haven't mentioned who the Neo Cloud is, but um, you know, there's not too many Neo Clouds out there, so make your own estimate of what that one might be. On top of this 530, they're looking to have additional grid power, which is available, um leasable power available now, 385 megawatts. And again, they're looking to increase the size of current sites. Uh Hunt in Texas, uh, there's a potential 192 megawatts there, and Muskage in Oklahoma, another 192 megawatts there as well. And they've even gone as far as to say that there are more opportunities, they're doing low studies and and BTMs at P cost and Muskagee. And we did cover this on yesterday's podcast there. They're looking to try and achieve an extra 815 megawatts at P cost and a further 725 megawatts at Muskogee. And if you look at those where it puts those sites, that puts them you know significantly into that one and a half gigawatts uh per site there. You know, talk about the likes of Sweetwater One at 1.4, these are big, big sites, and it looks like uh Core Scientific have been of finally done what a lot of shareholders have been waiting for. It's been such a a long time since their last uh contract um uh award. Um people were sort of saying, is this a one-off? Well, it's clearly not a one-off, and with um with this uh agreement with AMD and uh you know a big neo cloud there, um, there's potential there to grow that significantly further with that with that power at current sites potentially becoming available in the not too distant future.

SPEAKER_00

Yeah, again, just shocked to see share price down today. A lot of opportunity ahead for Core Scientific. Now, this investment highlight slide caught our attention as well. Uh, specifically the top right, you can see now over $24 billion in contract capacity. I wanted to ask how that compares to some of those other top contenders. You mentioned HUD 8 earlier in terms of contracted capacity. Uh, where is core stacking up?

SPEAKER_01

Oh, it's it's it's it's certainly up there with the likes of um with with and with TerraWolf. We know that HUT 8 have got about $26.6 billion of contracted capacity at the moment, but remember their deals are 15-year deals. Uh, with Core Scientific, they have you know 590 megawatts on a 12-year deal, and they have 530 megawatts on a 15-year deal, so it's not quite apples with apples. Um, I think they're both very good deals for for slightly different reasons. Um, everyone was impressed with the HUT 8 deal, and I think as news has come out bit by bit on the core scientific deals, everyone's been getting more and more impressed here. It's not always about top-end revenue, it's about how you can reduce the cost of building these sites. And you know, when you look at half of the megawatts that core scientific are releasing, that's going to be paid for by the client. Then, of course, you're not going to get two million dollars per megawatt, you're going to get slightly less than that, and you can see that in the revenues for that, but it's still an extremely good deal. And compare that to what would have happened had they had they maintained that power driving Bitcoin mining at Bitcoin mining's, you know, Bitcoin's current price of $63,000, $64,000. It sounds like um this is a great opportunity, and also the fact that they have two gigawatts in new site opportunities going forward as well. Um, everything seems to be uh you know coming coming along quite nicely. Of course, scientific, they will be the first companies to have significant revenues showing for this. You can see that now, and they've only literally got just over the halfway point in terms of revenues they're achieving now. By then of the next quarter, that uh co-location revenue will be a different number altogether, and people start paying a lot more attention. I do feel sometimes the market has to see the physical numbers coming through before they give it that sort of approval rating from a market perspective because we know that these earnings figures for for the majority for all these companies coming through now. We've highlighted the companies that are going to be providing earnings. I will tell you now, there'll be no green earnings for this quarter, they'll all be predominantly red, and it's just a case of how red they are. Those with significant hodlers will be redder because they will have the uh the the um the issue with the FESB rules, you know, it's a two-edged sword that you know it's great when Bitcoin price is going up, you can benefit then by your your hodl becoming more valuable. But when Bitcoin prices drop from it has from 126,000 down to 60,000 at the end of quarter two, you're paying the price for having that HODL. And you know, when you look at the the companies with the big hodls, the MARAs, the Riots, the Core Scientific Hut 8's in that group as well. Also, ABTC is in that group as well, which is a sister company of HUT 8. Um, you're going to see some significant losses just because of the HODL that they hold, not talking about the rest of the business. Um, and that's the challenge you're going to get for them for these next few quarters. Once we see that power light core scientific moving across to HPC, we'll see a total turnaround in earnings. And then maybe in a couple of years' time, when we've got through the mining pit, probably past the next halving, when literally a lot of these public miners will be thinking, you know, now's the time we just literally switch across everything, then we'll start seeing earnings as people will be expecting to see more of a green position, like we see with some of the big tech companies, like the Nvidia's, um, and and so on and so forth.

SPEAKER_00

Yeah, and it'll be interesting if that Bitcoin revaluation starts to go up as the AI revenue comes in, that could be a big catalyst. The other way, uh, also I think your point about the show me or prove it story right now is very valid. If you would go back a year and say, hey, all these little Bitcoin companies are gonna pivot to AI, land hyperscaler clients, and then deliver these contracts perfectly. I don't think a lot of people would have had a lot of trust in that. But you and I have been following the story, following the developments. Uh, one of the other sides we wanted to talk

What Data Center Buildouts Really Cost

SPEAKER_00

about this breakdown of cost. We've been very uh positive towards Keel talking about the permitting insight and some of the applications, uh, the process that Ben's talked through. This side gives us good insight into that cost uh we've seen on a per megawatt basis. So we talked nine, ten, twelve, fourteen million. Now we can actually see where that money's going.

SPEAKER_01

Yeah, and it's it's interesting that core science have put this in their presentation back because when they started looking at these costs a couple of years ago, they were highlighting probably close to eight million dollars, and they've been telling the story of how these costs have been going up. I met with a team um back in in May, and I said, like, you know, eight to ten millions, that's still realistic. And they were saying, to be honest with you, it's probably closer to 12 million, and that's a that's a big difference in terms of you know margins. Um, but the great thing is they've broke it down into three uh areas. They've looked at you know the cost there, and they're now estimating length to 12 million, that's probably fairly accurate. And we know, having spoken to a number of CEOs, this is one of the questions we've been asking them. Have they seen an increase in you know what we consider the things that would be going up? If you're using things that are taking a long time to uh to get, so some of the equipment, some of the transformers, switch gear, etc., these long lead items that everybody's trying to get, supply and demand suggest they're going to be increasing in pricing. If you're going to use you know hundreds of electricians uh across your site, and everybody around you is trying to get the same hundreds of electricians, you're going to see increased costs for those. And we have seen that coming through there. Uh, you know, construction um um engineers, uh, you know, electrical engineers, maybe 20-30% higher in costs because the fact that you know you don't necessarily have uh a tapped market available at these sites. You know, some of these sites are co-looked you know, around you know, maybe six or seven other hyperscaler sites, everyone's gonna be vying for the same labor. And so uh great to see that we've got a breakdown. I mean, I'm a I'm a chartered management accountant, costs is my sort of speciality, so I always enjoy seeing where a company's made an effort to show these. And they've broke it down to three areas. They broke it down to staff costs, so the design, engineering, permitting, utility interconnection, etc. They've broke it down into their own equipment, so the transformer switch gear generators, and they're also looking at construction labour and on-site execution, electrical technicians, mechanical technicians, equipment operators, pipe fitters. Reminds me of my days in the oil and gas industry. Uh, pretty much all those types of um of labour were required in the oil and gas industry, and I was always had trouble finding the mechanical um engineers. They were the hard, they were some of the highest paid because they were the hardest to find. There's a reason for them to be the highest paid. It doesn't necessarily mean they're the most technical, it just means because there's not as many of them, you have to pay a premium to buy them. And I'm wondering now, are we seeing that premium being paid for certain elements of these of these labour cohorts? As each company is not building small sites, they're building enormous sites, and they need a lot of labour. We've been on the children's site Bryce, we saw you know a thousand people, twelve hundred people on that site there, and there'll be a you know, a whole string of electrical, mechanical, construction engineers on that site there, and you know, we travelled across the length of Texas over five days, probably did about 1,500 miles, and um, you know, witnessed a lot of activity, a lot of sites um, you know, getting ready for HPC. And so this is only just at the start point, you know, a lot of these people are signing deals and now having to build out these sites once the deal's been signed. And so, you know, is that labor force there? Um, we'll see how how how much these estimates of 11 to 12 stay at 11 to 12. Will they start to increase year by by year as that total gigawatts of power in America starts rising to meet the demand that people are trying to access it?

SPEAKER_00

Yeah, and it's kind of interesting looking at this. For decades, the white collar jobs replaced blue collar jobs. Now it Blue-collar jobs that are building the AI factories that will ultimately replace the white-collar desk workers. So interesting dynamic there. OFE costs, you said that's one of the categories, owner-furnished equipment. So there you go, you guys, your little trivia for the day. Final point on Core Scientific Anthony. Well, the share price may be down today. It looks like it actually just went positive. Uh, Cantor in typical fashion, coming out with an updated price target based on today's news, that AMD deal. Uh, they definitely think there's a lot of opportunity here.

SPEAKER_01

Absolutely. And the great thing about Canter is they do bring out their updates. When there's a big news story, I'm always watching my email account to see when it comes through, and it came through as expected today, a couple of hours after the uh update itself. Now, when it came out, the share price was around about $20.74. They're giving it an overweight rating, and they rightly should be giving it an overweight rating. This is a big, big deal. Added to the big, big deal they've got already with Core Weave. They're giving the share price now a target price of $39. And as I look at the live price now, it's $20.98. It did go as high as intraday high today of about $23.5. When that announcement came, and that's what caught my attention. I saw a spike in the Core Scientific share price in my account. I do have some shares in Core Scientific. I have had some shares today because you know, when you announce a deal that size, there, this is before the announcement from Cancer came out. I thought, you know, it starts looking at value. Um, I did sell some recently at the third just over $30. I think $20 is a good place to get back into this. Is in my personal view, um, and I've done a lot of due diligence in the space to warrant that. And I share all my trades, and I know you do with with with your uh members on your Patreon there, so they're aware of when I make the trades. I've already sent out messages today of this of the trades I've made today, so all my Patreon members get those, and they can it helps when they do their due diligence as well. They're seeing what I'm doing there, not necessarily have to follow me, and I know a lot of people buy a lot of different stocks that I buy, but I'm trying to you know narrow it to about sort of five or six stocks in the space where I've done a lot of work over the last six years. Uh, Core Scientific is one of those companies there, and um, I think today's announcement is a very, very good announcement during a period where stock prices are not reflecting you know the true position. And as I go back to some of those market capitalizations, they seem to be getting a lot lower. Core Scientific's market cap today in the six billion dollar range. That was a ten billion dollar stock not too long ago, so you can see the impact of literally three or four weeks of the market can have on a company. Um, you know, it's do did I find the bottoms today? I don't know, but um, you know, I'm I'm happy with the shares I bought today. I didn't buy too many shares, but I added to my current position, and um hopefully uh if it gets close to that $39, I'll have nearly doubled my money. So uh that's a positive thing to end with today, right?

SPEAKER_00

Yeah, we've had quite a bit of fun kind of swing trading uh Cypher, Riot, Core, and Wolf in that $20 to $30 range. It seems these companies really like moving in that $10

Galaxy Adds Second Texas Site

SPEAKER_00

band. Uh, final piece of news today, guys. Galaxy has acquired a 500-acre site, which represents their second Texas-based data center site. I'll let you walk through the details here, Anthony. But again, a great demand signal. Not only are they signing contracts, uh ERCOT, obviously a huge data center market, but now we're seeing more sites added into the pipeline.

SPEAKER_01

Yeah, we talked about yesterday about the 1.6 gigawatt Helios flagship site. Previously, that site was owned by Argo Blockchain, but uh Galaxy might have picked that up as probably uh Mike Nogas' best deal of his life, and you can see how that's going on already there. This is another site in Texas. This is about if you were to get a car and drive from Helios, this is probably about 400 miles closer to Dallas than the Helios site there. So that tells you you drive 400 miles in England, you're in Scotland, um, you're in a different country, you drive 400 miles in Texas, you've not even you've not even got halfway through the state. So, you know, I think you can put the UK in Texas probably maybe three or four times uh in terms of size there. If I'd have done 1500 miles in my car in UK, I'd have gone around the whole of the UK probably twice. And and so, you know, we did it in a week there going to five sites. Now, this 74 megawatt initial development phase will will power expectedly in 20 uh 28 and potential to scale into a multi-hundred megawatt campus by 2030. Now, the city themselves they benefited from the 7.5 million land sale revenue, and also an estimated 130 million will be added to the local property tax uh uh base as well. So this has been privately funded by Galaxy itself, it builds its own substation, it funds water infrastructure. And one key thing is it uses that closed loop cooling system, mirroring its 1.6 gigawatt Helios flagsheet that we've already spoken about, and uh you know it also confirms that they are looking to have multi-campus strategy uh beyond that Dickens County um and it's not just a one-off purchase and are now moving you know across the state, and we might see them move you know outside the state for further purchases. But Galaxy slowly but surely building a very, very strong base uh for its strategy into HPC.

SPEAKER_00

Yeah, and we really see that a lot of these companies now, every one of these projects that delivers really verifies or validates the entire group. So it will be interesting to see as we move through earnings. We mentioned a big lineup heading into next week. Uh, pop over to the website, you guys, if you've missed any of our recent earnings interviews, always nice to refresh going into the next round. We've got them all listed there by company along with some of our special guests. So, with that being said, congratulations to Core, Applied Galaxy, and Hive today. Some great news across the sector. Again, while the prices maybe don't reflect it, we think there's a lot of opportunity here. Let us know your thoughts below. We'll see you back here tomorrow.