According to "The Block" report, based on the trend of transformation towards artificial intelligence and high-performance computing (HPC), financial services group Macquarie has invested in Bitcoin mining stocks including MARA, Riot Platforms, Core Scientific, CleanSpark and Cipher Mining. An "outperform" rating.
In recent years, Bitcoin mining companies have gradually diversified their business into providing hosting infrastructure for AI and HPC in addition to pure cryptocurrency mining. Macquarie analysts Paul Golding and Emma Liang said this trend accelerated after Bitcoin’s fourth halving in April.
Analysts wrote in a note released on Tuesday:
“Some miners see their unprecedented access to electricity...as an opportunity to diversify into custody operations unrelated to cryptocurrencies. Others see it as interfering with efforts to accumulate Bitcoin on their balance sheets... But in most cases, growth in mining capacity, and/or land/GPU acquisitions for HPC/AI, is accomplished through dilutive equity issuances.”
Macquarie believes that several mining companies will benefit significantly in the long term as the transition to HPC accelerates. Analysts also noted that while it is still early days for AI cloud products to operate in Bitcoin miners' facilities, these companies have the potential to play a significant role in the AI computing market.
They said that the convergence of power infrastructure, computing resources and bandwidth in the mining industry represents "tangible value beyond the expected appreciation of Bitcoin." As demand continues to exceed supply, the demand for AI computing infrastructure provides a " Mark-to-market opportunities.
Views on various mining companies
Within Macquarie’s institutional Bitcoin miner peer group, MARA (formerly Marathon Digital, ticker MARA) continues to have the largest deployed capacity while providing infrastructure to the industry. They give the stock a $22 price target and view it as the largest company with broad Bitcoin infrastructure exposure. MARA closed at $16.14 on Wednesday, down nearly 30% year to date.
Macquarie said Riot’s mine is one of the largest in the industry and, once fully built, will increase operational efficiency while enabling the development of custom cooling infrastructure. Riot's stock (ticker RIOT) closed at $7.44 on Wednesday, down 51% year to date. Macquarie gives the stock a $15 price target.
Core Scientific is currently the only miner with a scaled HPC/AI managed deal, which diversifies its revenue and reduces Bitcoin risk. Macquarie’s $16 price target is based on the company’s AI custody opportunities while maintaining BTC mining scale. Shares of Core Scientific (ticker CORZ) closed at $12.35 on Wednesday, marking a gain of more than 260% in 2024.
Macquarie noted that CleanSpark continues to acquire smaller mining companies while maintaining its sustainability ethos and increasing the scale of its consolidated mines. Macquarie gives the stock a $20 price target given the company's differentiating qualities, including its geography and M&A strategy. CleanSpark stock (ticker CLSK) traded at $9.34 on Wednesday, down 12.5% year to date.
Macquarie said Cipher Mining is reaching the peak of its development, with the construction of its wholly-owned Odessa mine completed, and the company also announced a series of new mines supporting Bitcoin mining and/or HPC. The company gave the stock a $6 price target, citing "our view of the potential for near-term profit and scale inflection points." Shares of Cipher Mining (ticker CIFR) traded at $3.86 on Wednesday, down 6.4% year to date.
Source
