Bernstein analysts sustain “Outperform” ratings for major Bitcoin miners, despite stock underperformance compared to Bitcoin. Revised price targets reflect structural changes, AI advancements, and hash rate adjustments, supporting valuations that suggest significant upside potential. Core Scientific and Riot Platforms are among the highlighted firms benefiting from shifts towards HPC opportunities.

Analysts at Bernstein have reiterated their “Outperform” ratings on leading Bitcoin miners, despite the notable underperformance of their stocks relative to Bitcoin itself. Key indicators supporting this optimism include miners’ Bitcoin treasury holdings and diversification into high-performance computing (HPC), which together provide a cushion amid the volatility observed in the current market.

Recently, Bernstein revised price targets for major Bitcoin mining firms, reflecting changes in hash rates and the growing potential of AI and HPC. Institutional investors have begun to focus more on the AI capabilities of these miners, despite the fact their stock performance has not kept pace with Bitcoin, which has experienced a 10% decline year-to-date.

The analysts highlight a 20-40% drop in miner stocks this year, a trend that is steeper compared to Bitcoin’s decline. However, Bernstein believes that attractive valuations and favorable EBITDA forecasts for 2025 justify an “Outperform” rating on several companies. The revisions also include updated estimates regarding hash rates and power allocations towards AI/HPC applications.

Core Scientific’s price target was adjusted to $17, indicating a potential upside of 150.3% from its closing price. This optimism is driven by its contracts with CoreWeave, a leader in AI computing. Riot Platforms saw its target lowered from $22 to $19, suggesting a 146.9% upside, as the firm shifts power to AI over Bitcoin mining. Bernstein noted, “RIOT with its 2 GW power portfolio is attractively positioned, however, the stock would need a catalyst in form of progress on securing an AI co-location partner for the Corsicana site.”

CleanSpark and Iris Energy received price targets of $20 but faced reductions from earlier estimates of $30 and $26, respectively. CleanSpark’s new target implies a 170% upside while Iris Energy suggests a 174.9% potential gain. Meanwhile, Marathon Digital was rated Market-Perform, with a target of $23, representing a significant increase from its previous closing price of $12.53.

Bernstein maintains a Bitcoin price forecast of $200,000 by Q4, which serves as a valuation floor for miners holding Bitcoin. The analysts also point out the increase in hash rate since the April 2024 halving, which has intensified production pressures. They note that strategic shifts towards AI and HPC have substantially influenced their models.

Core Scientific is expected to double its critical IT load, focusing on AI and new acquisitions. Meanwhile, Riot Platforms is awaiting an AI partner to maximize its capacities, while CleanSpark and Iris Energy are contending with rising hash rate competition.

Despite the sluggish performance of miners in comparison to Bitcoin, Bernstein identifies long-term value in these firms, attributing potential recovery to the growing demand for AI infrastructure amid Bitcoin’s commodity cycle.

In summary, Bernstein’s revised outlook on Bitcoin miners emphasizes their potential despite recent stock declines. The firm maintains “Outperform” ratings due to diversified strategies into AI and HPC, alongside projections of Bitcoin’s future price. Key players like Core Scientific and Riot Platforms are especially highlighted for their growth prospects even amidst volatility in the cryptocurrency market.

Original Source: www.benzinga.com

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