Core Scientific Targets 1.5 GW AI Campus in Texas

NEW YORK, May 2 —

Core Scientific, Inc. (CORZ) is targeting 1.5 gigawatts of AI data center capacity at its Pecos, Texas campus, with lease availability set for early 2027 and two new material financing agreements signed within 17 days of each other in March. The ambition is real. So is the $539 million annual free cash flow burn, a 16% revenue decline on a trailing basis, and a senior officer who sold shares in every single week of a five-week, 37% stock rally.

The Pecos Ambition

The 1.5 gigawatt buildout targets hyperscaler demand for purpose-built AI compute. Texas offers power infrastructure at a scale coastal markets cannot match. Core Scientific listed the campus for lease with early 2027 as the availability date. This is not a land play. It is a direct solicitation for multi-gigawatt hyperscaler contracts.

Core Scientific entered two separate material debt agreements — one filed March 6 and another filed March 23 — per SEC disclosures. Two new obligations in 17 days is a fast financing pace. Against negative $539 million in annual free cash flow, those filings confirm the Pecos build runs on borrowed capital, not cash the company generates. The cost and structure of those agreements will determine whether this build creates or destroys equity value.

Core Scientific filed Regulation FD disclosures on April 21 and again on April 27, both tied to the Pecos expansion. While the company was broadcasting the AI campus story to investors, a senior officer was selling shares into the resulting rally.

A Balance Sheet That Asks for Faith

Trailing-twelve-month revenue of $320 million fell 16% year-over-year. Gross margin of 17.1% is a thin cushion for a capital-intensive buildout. The company burned $539 million in free cash flow over the past year. At $20.35 per share and a $6.42 billion market cap, the stock trades at 48.5x forward earnings — a multiple that assumes an earnings inflection the current financials do not show.

The earnings record compounds the concern. Three recent quarters: a miss of $0.13 actual against $0.02 consensus, a beat of $0.07 against $0.01, then a miss of $0.20 actual against $0.07. The last quarter's loss was nearly three times what analysts expected. Bitcoin mining revenue is declining. AI infrastructure revenue has not replaced it. The company has no stable revenue run-rate to anchor the current valuation.

The 48.5x forward P/E requires an earnings inflection that won't arrive until Pecos comes online in early 2027 at the earliest. Until then, the company funds operations with debt, trades on expectations, and has missed consensus estimates in two of its last three quarters.

Five Weeks, One Direction

The Form 4 filing record for Todd M. Duchene over April is as consistent as any systematic selling program on file. April 1: 10,000 shares at $15.25. April 6: 10,000 shares at $16.49. April 13: 9,600 shares at $18.61 and 400 shares at $18.99. April 20: 10,000 shares at $19.80. April 27: 10,000 shares at $20.94. Total: approximately 50,000 shares and $910,977 in proceeds, across six transactions over five weeks, as the stock climbed 37%.

The filings carry a "See Remarks" notation consistent with a pre-arranged 10b5-1 selling plan, which provides legal protection and means the schedule was set before the April price move began. That matters for legal purposes. It does not change the record: the sales ran without interruption through the stock's entire 37% April advance and through both Regulation FD disclosures on the Pecos expansion.

CEO Adam Sullivan's equity activity is structurally different. Sullivan received a grant of 741,545 shares on March 31, with a same-day tax-withholding disposition of 315,307 shares at $14.96, totaling $4.7 million. A second withholding disposition of 87,355 shares at $19.08 followed on April 15, totaling $1.67 million. CFO James P. Nygaard Jr. had a withholding disposition of 92,725 shares at $16.42 on March 17, totaling $1.52 million. Tax-withholding dispositions settle tax liabilities on vesting events. Large grants produce large withholding transactions. That is compensation mechanics, not a market call.

Duchene's weekly open-market sales are a different category entirely. Against those $910,977 in outflows, the sole open-market insider purchase in the 90-day window was Eric Stanton Weiss buying 7,000 shares at $14.53 on March 9 for $101,700. Net open-market insider positioning over the period: approximately $102,000 in purchases versus $911,000 in sales.

Where the Bulls Have Parked

The bull case has real institutional backing. Fifth Third Bancorp opened a new $59.8 million position in CORZ stock. A regional bank committing that size to a single name is not a routine allocation. It reflects a direct bet on the AI infrastructure thesis, anchored in the Pecos capacity pipeline. The analyst consensus price target is $26.55, roughly 30% above the current price of $20.35.

That institutional entry runs directly counter to the insider exit. Fifth Third opened a $59.8 million position as a named officer ran a weekly liquidation program through the same price range. When institutions buy and insiders sell in the same window, the practical question is which side has more visibility into near-term execution.

What Changes the Picture

The Pecos thesis gets its first concrete test when Core Scientific discloses actual lease terms from the 1.5 GW campus. Those numbers will either support the current multiple or expose it. Early-2027 capacity availability means AI revenue enters the income statement at best in late 2027, leaving another year-plus of cash burn and new debt before the financials can support the valuation. The two March debt agreements will come into full view in subsequent filings. The cost of that capital determines whether the AI pivot generates equity value or transfers it to lenders.

Caution is the defensible position. The 1.5 GW Pecos buildout and Fifth Third's institutional commitment point to a real AI infrastructure opportunity. The $539 million FCF burn, 16% revenue decline, 48.5x forward P/E, two significant earnings misses in three quarters, two new debt obligations in rapid succession, and five weeks of systematic open-market selling as the stock ran from $15 to $21 are a strong case against buying before Pecos lease terms are public.

The next clear checkpoint is the company's upcoming earnings disclosure. Any guidance on Pecos lease signings or debt terms will either tighten or widen the range of outcomes. Run the free Core Scientific, Inc. deep-dive here.

Basis Report does not hold positions in securities discussed. This is not investment advice.

Frequently Asked Questions

What is Core Scientific's Pecos Texas expansion?

Core Scientific, Inc. is expanding its Pecos, Texas campus to 1.5 gigawatts of capacity for AI data center infrastructure, with early 2027 as the targeted lease availability date. As detailed above, the buildout is backed by two new material financing agreements entered in March 2026 per SEC 8-K filings, against a backdrop of negative $539 million in annual free cash flow.

Is Core Scientific stock a buy?

The analyst consensus price target of $26.55 sits roughly 30% above the current share price of $20.35, and Fifth Third Bancorp opened a new $59.8 million position. However, a 48.5x forward P/E, $539 million FCF burn, and two significant earnings misses in three quarters are a strong case for caution until Pecos lease terms are disclosed.

Why is a Core Scientific officer selling stock?

Todd M. Duchene executed open-market sales totaling approximately 50,000 shares for roughly $911,000 across five consecutive weeks in April 2026, per SEC Form 4 filings, as CORZ climbed from $15.25 to $20.94. The transactions appear tied to a 10b5-1 pre-arranged plan — but the sales ran without deceleration through the stock's entire April rally and through both of the company's Pecos expansion investor communications.

What is Core Scientific's free cash flow and revenue?

Core Scientific's trailing-twelve-month revenue is approximately $320 million, down 16% year-over-year, with a gross margin of 17.1% and free cash flow of negative $539 million. As discussed above, those figures are the central financial constraint on a capital-intensive 1.5 GW AI campus buildout that will not generate revenue until late 2027 at the earliest.

Who are Core Scientific's institutional investors?

Fifth Third Bancorp's new $59.8 million position in CORZ is among the largest recent institutional buys on record. The analyst community maintains a consensus price target of $26.55, roughly 30% above current levels — though that institutional conviction ran concurrently with net insider open-market selling of approximately $809,000 over the same 90-day period, per the filing analysis in this report.