Bitcoin Miners Face Challenges But Analysts Cite Optimism Amid AI Opportunities
Bernstein analysts have revised price targets for Bitcoin miners, acknowledging opportunities driven by AI and Bitcoin’s valuation support. Despite significant stock price declines, firms like Core Scientific, Riot Platforms, CleanSpark, and Iris Energy received Outperform ratings. Bernstein maintains its Bitcoin price forecast at $200,000 by Q4 2025, suggesting potential for recovery as miners adapt to AI opportunities.
Bitcoin miners such as Core Scientific, Riot Platforms, CleanSpark, and Iris Energy have encountered a tumultuous year marked by declining stock values. Recent analyses from Bernstein, however, present a more optimistic view, emphasizing the integration of artificial intelligence (AI) opportunities alongside Bitcoin’s inherent valuation support. Despite miner stocks declining by 20-40% compared to Bitcoin’s 10% drop, Bernstein’s analysts maintain Outperform ratings based on their insights regarding future prospects.
In a recently released report, Bernstein adjusted their price targets for prominent Bitcoin mining firms based on anticipated shifts in hash rates, the potential of high-performance computing (HPC), and stable Bitcoin price forecasts. They note a substantial institutional interest in the AI capabilities of these miners, despite their stocks lagging behind Bitcoin’s performance thus far in 2024. Key drivers identified for these changes include rising hash rate estimates and new strategic contracts.
For Core Scientific, Bernstein has projected a price target of $17, signaling a 150.3% upside from its recent closed figure of $8.68. This revision is attributed to Core Scientific’s considerable 590 MW data center contracts with CoreWeave. Bernstein reassures investors by dismissing concerns regarding any slowdown in AI-related capital expenditures that previously impacted stock performance.
Riot Platforms received an adjusted price target of $19, down from $22. The new projection indicates a 146.9% upside from its current price of $7.78, reflecting the company’s shift of 600 MW of power resources toward AI applications. Bernstein identifies the necessity for a partnership in AI co-location to rejuvenate stock potential.
CleanSpark and Iris Energy were also rated as Outperform, with revised targets of $20 each, which is a reduction from their previous targets of $30 and $26. This revision stems from intensified competitive pressures due to rising industry hash rates. The target for CleanSpark suggests a possible gain of 170% from $8.01, whereas Iris Energy implies a 174.9% increase from $7.20.
Marathon Digital, rated as Market-Perform, has a price target increased to $23 from $12.53, providing a projected 153.7% upside. Bernstein maintains its Bitcoin price forecast at $200,000 by Q4 2025, which serves to underpin miner valuations based on their Bitcoin holdings. The analysts stipulate a 30% hash rate increase projected since the April 2024 halving is a key factor impacting production dynamics.
Bernstein’s report highlights a significant commercial development for Core Scientific by emphasizing a further 70 MW contract with CoreWeave, hinting at considerable revenue growth. They project that the AI/HPC segment could contribute up to 45% of Core Scientific’s total enterprise value by 2025, enhancing their prospects.
Future expansions at Core Scientific aim to enhance its infrastructure post-2026, with a focus on both AI and mining operations. Bernstein’s analysis points out that RIOT is well-positioned with its extensive power capacity, while CleanSpark and Iris Energy keep battling against current competitive conditions. Notably, Bernstein’s long-term outlook for these miners remains positive, anticipating recovery amidst potential AI infrastructure expansions and Bitcoin’s commodity cycle.
In conclusion, Bernstein’s recent analyses present a refreshing perspective for Bitcoin mining firms despite the challenges faced over the past year. By identifying key growth drivers, particularly in the AI domain and with stable Bitcoin price expectations, Bernstein affirms the long-term viability and potential upside for firms such as Core Scientific, Riot Platforms, CleanSpark, and Iris Energy. While short-term stock fluctuations remain a concern, the analysts’ optimistic outlook reflects confidence in the miners’ recovery and adaptation strategies within the evolving market landscape.
Original Source: in.benzinga.com
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