Core Scientific Announces Massive Oklahoma Expansion to 1.5 GW

What happened

Core Scientific disclosed a multi-tiered strategy to scale its Muskogee, Oklahoma campus to 1.5 GW of gross power (1.0 GW leasable), including an agreement to acquire Polaris DS LLC with 440 MW of contracted power. This is a substantial increase from the previously announced ~590 MW CoreWeave target and signals a more aggressive land and power acquisition strategy. The company is essentially doubling its potential colocation capacity beyond the current customer concentration with CoreWeave. However, the move multiplies the already heavy capex commitments (~$1.4B through 2027) and adds execution risk, especially given the existing $500M term loan maturing in early 2027 and a material weakness in internal controls. Funding details for the expansion were not disclosed, leaving investors to question whether this will rely on more customer-funded capex, additional debt, or equity dilution.

Implication

The expansion plan validates strong AI/HPC demand but amplifies existing risks: (a) capital requirements likely exceed $2B through 2027, (b) the March 2027 term loan maturity becomes more critical, and (c) the ICFR material weakness can complicate capital access. While customer-funded construction could mitigate balance-sheet strain, any shortfall would force dilutive equity issuance or restrictive debt. The bull case ($22) could materialize if funding is secured smoothly and the expansion accelerates revenue, but the bear case ($12) becomes more likely if execution stumbles or refinancing tightens. Investors should insist on concrete financing details and ICFR remediation progress before committing new capital.

Thesis delta

The core thesis remains unchanged—execution and refinancing are key—but the probability of the bull case increases if the expansion is well-funded, while the bear case worsens if it strains liquidity. The prior WAIT rating is reinforced; the attractive entry remains $14, as the added scale does not offset the increased uncertainty from capital demands and controls.