Bitcoin BTC$107,661.53 Wall Street broker Bernstein said in a note on Monday that miners are now an integral part of the artificial intelligence (AI) value chain and are updating models for the sector.
The broker claimed that miners’ large power infrastructure and facilities have become critical to AI data centers and are currently seen as the biggest execution bottleneck for the rapidly growing industry.
All of the U.S.-listed Bitcoin miners covered by the firm have pivoted to maximizing the value of their power assets rather than betting on rising Bitcoin prices, analysts led by Gautam Chughani wrote.
The firm’s analysts abandoned the discounted cash flow (DCF) methodology in favor of a sum-of-the-parts valuation that combines miners’ Bitcoin holdings, mining EBITDA, AI colocation and cloud revenue, and the potential value of power plants allocated for AI data centers, using a conservative $3 million per megawatt (MW) multiple.
Bernstein raised its price target on Core Scientific (CORZ) to $24 from $17, citing the company’s focus on high-performance computing (HPC) colocation and plans to deliver approximately 590 megawatts of IT load by early 2027.
The report noted that shareholders’ rejection of a deal with Coreweave gave management more room to optimize value, and suggested a new partnership is expected in the fourth quarter.
Riot Platforms (RIOT) also raised its target from $19 to $25, reflecting the AI potential of its 1 gigawatt Corsicana site. Meanwhile, CleanSpark (CLSK) was raised from $20 to $24 as it moves to a hybrid Bitcoin and AI model through new hires and partnerships.
Bernstein rates IREN, CORZ, RIOT, and CLSK as outperforming, and the broker said Bitcoin miners with current or potential AI contracts are being revalued by the market as key enablers of next-generation computing infrastructure.
Mining stocks soared in pre-market trading on news of IREN’s AI cloud deal with Microsoft.
IREN rose 21% to around $60.75 in early trading. Core Scientific shares rose 6.8% to $23. Riot shares rose 3% to $20.38. Clean Spark rose 3.6% to $18.44.
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