Macquarie has initiated "outperform" ratings on several bitcoin mining stocks, including MARA, Riot Platforms, Core Scientific, CleanSpark, and Cipher Mining, citing a growing shift from crypto-specific operations to AI and high-performance computing (HPC) models.

In recent years, bitcoin miners have increasingly diversified their operations, moving beyond pure crypto mining toward hosting infrastructure for AI and HPC. This trend accelerated following Bitcoin's fourth halving in April, according to Macquarie's analysts Paul Golding and Emma Liang.

“Some miners see their unprecedented access to power…as an opportunity to diversify into non-crypto-related hosting,” analysts from Macquarie wrote in a Tuesday evening note. “Others see this as a distraction from amassing bitcoin on the balance sheet... In most cases though, growth in mining capacity, and/or land/GPU acquisition for HPC/AI, is being achieved via dilutive equity issuance.”

Macquarie sees that as the shift toward HPC accelerates, several miners will benefit significantly in the long term. The analysts also noted that while operationalizing AI cloud offerings in bitcoin miners' facilities is still in its early stages, there is potential for these companies to play a major role in the AI compute market.

The concentration of power infrastructure, compute resources, and bandwidth within the mining sector represents “tangible value beyond forecast appreciation in bitcoin,” they said, with the demand for AI compute infrastructure providing a “mark-to-market” opportunity as demand continues to outpace supply.

MARA continues to command the largest deployed capacity of Macquarie’s institutional bitcoin miner peer group, while providing infrastructure to the sector. They gave the stock a $22 target price, seeing it as the most-scaled shop for broad exposure to Bitcoin infrastructure. MARA’s stock (ticker MARA) trades around $16.16 per share and is down nearly 30% in the year-to-date period.

Riot's sites are some of the most scaled, Macquarie said, yielding operational efficiencies once fully built out while advancing bespoke cooling infrastructure. The firm gave the stock a $15 price target. Riot’s stock (ticker RIOT) trades around $7.50 and is down 51% year to date.

Core Scientific is the only miner with a scaled HPC/AI hosting deal right now, which diversifies revenues and reduces BTC risk. Macquarie’s $16 price target is premised on the company's AI hosting opportunity while maintaining its scale in BTC mining. Core Scientific’s stock (ticker CORZ) trades around $12.50 and is up more than 260% in 2024.

Macquarie noted that CleanSpark continues to acquire smaller miners while holding on to its sustainability ethos and upscaling tucked-in sites. It gave the stock a $20 price target, given the company's differentiated attributes like geography and M&A strategy. CleanSpark’s stock (ticker CLSK) trades around $9.50 and is down 12.5% year to date.

Macquarie said Cipher Minring is “hitting its stride,” with wholly-owned Odessa built out and a flurry of new site announcements to support BTC and/or HPC. It gave the stock a $6 price target “given what we think is a potential near-term inflection in profit and scale.” Cipher Mining (ticker CIFR) trades around $3.86 and is down 6.4% year to date.

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