Core Scientific (NASDAQ: CORZ), a prominent Bitcoin mining company transitioning into AI infrastructure, reported a $347.2 million net loss for Q1 2026, highlighting a significant decline in mining revenue. The company’s digital asset self-mining revenue fell 55% year-over-year to $30.1 million, down from $67.2 million in Q1 2025. Meanwhile, high-density colocation services have become its primary revenue driver.

The $347 million loss included $266.5 million in non-cash impairment charges and another $30.8 million non-cash loss tied to changes in the fair value of warrants and contingent value rights. On a per-share basis, the company reported a net loss of $1.06, a stark contrast to the $1.24 earnings per share reported one year earlier.

Total revenue for the quarter rose to $115.2 million, up from $79.5 million in Q1 2025. However, this figure fell short of analysts’ expectations of $120.2 million, according to Zacks Equity Research. The shortfall underscores the challenges faced by Core Scientific in the current market environment.

Bitcoin Mining Revenue Weakens Further

Core Scientific mined 279 Bitcoin during Q1, a 45% drop compared to the same quarter last year. To cover operational expenses and planned capital investments, the company sold 2,385 BTC for $208.3 million. The weak mining results reflect the broader struggles of Bitcoin miners dealing with declining profitability and increasing competition.

Despite the downturn in mining revenue, Core Scientific’s stock has seen some resilience in recent months. Shares closed at $24.63 on Wednesday, marking a 19.6% gain over six months. However, the stock fell 7.43% in pre-market trading to $22.80 following the earnings announcement.

Shift to AI Infrastructure Drives Growth

Core Scientific’s high-density colocation business now dominates its revenue streams. Colocation revenue surged to $77.5 million in Q1, up from just $8.6 million a year earlier. The company is currently billing for 243 megawatts of capacity, representing approximately $350 million in annualized colocation revenue.

This growth is largely attributed to hosting agreements with AI-focused clients like CoreWeave. Core Scientific first inked a 12-year deal in June 2024 to deliver 200 megawatts of infrastructure for CoreWeave’s high-performance computing needs. By February 2025, this partnership had expanded to 590 megawatts across six sites.

Expansion Plans Underway

In a separate announcement, Core Scientific revealed plans to scale its Muskogee, Oklahoma campus to 1.5 gigawatts of gross power, with 1.0 gigawatt allocated for leasable capacity. The expansion includes acquiring Polaris DS and constructing a second 82.5-megawatt building on-site. These moves align with the company’s strategic pivot toward supporting AI and high-performance computing clients.

While Core Scientific’s legacy Bitcoin mining operations continue to falter, its focus on AI infrastructure appears to offer a lifeline. Whether this transition can offset the decline in its core business remains a key question for investors watching its next moves.

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