By Michael Scott
Bernstein upgrades Bitcoin mining stocks CleanSpark, Core Scientific, Iris Energy, and Riot Platforms to outperform rating.
Investment firm Bernstein recently disclosed that it upgrades stocks of Bitcoin miners, including CleanSpark (CLSK), Core Scientific (CORZ), and Riot Platforms (RIOT), to outperform ratings. Meanwhile, the firm rates Marathon Digital Holdings (MARA) as a market-performing stock.
Bernstein cites the substantial operational capacity and ambitious expansion by Riot Platforms (RIOT) as deserving of a rating upgrade.
The report identifies the mega 1GW site in Texas that RIOT is energizing over 2024-25 as a meaningful capacity. Also, the report acknowledges that Riot concluded the acquisition of block mining with 60 operational MW and extendable to 300MW.
The investment firm analysts note that though RIOT platforms trail in production efficiency, the miner saw improved performance in July. The improved production efficiency is attributed to swapping the older S19 XP rigs with the recent generation models. RIOT anticipates its capacity to exceed 36 EH/s hash rate by Q4 2024.
CleanSpark Energy Efficiency
Bernstein analysts accord CleanSpark (CLSK) a high rating, citing its energy efficiency blend with the realized hash rate. The analysts disclosed that it is crucial to note that, like CleanSpark, Irish Energy (IREN) is within the sweet spot for its realized hash rate/uptime and energy efficiency.
Bernstein’s report considers CleanSpark among the top-three ranked Bitcoin producers, joining Marathon (MARA) and Core Scientific (CORZ).
The analysts hail CleanSpark for its operational efficiency priorities, placing it in a solid competitive position. In particular, CLSK stands out for its realized hash rate from previous higher uptime.
Bernstein analysts are bullish on Iris Energy (IREN), citing its ambitious expansion plans. The analysts take note of the two Texas-based mega sites that are now a work in progress.
Bernstein is spotlighting Irish Energy’s potential within the artificial intelligence (AI) sector. The report notes that the Bitcoin miner appointed Morgan Stanley to explore AI deals for mega sites.
Bernstein analysts are optimistic IREN will surpass the 30 EH/s by Q4 2024, thanks to the 750 MW facility at Childress, Texas.
Core Scientific (CORZ) is at the pole for outstanding cost efficiency and superb AI strategy. Bernstein analysts profile CORZ as best in class for its hash cost, facilitated by low power costs, uptime, and tighter control over selling, general, and administration (SG&A) spending.
Bernstein notes that CORZ is now a clear leader in AI strategy, with 382MWs earmarked for the AI/HPC Data centres. Its notable achievement is the $6.7Bn co-hosting contract it recently entered with CoreWeave.
CORZ’s diversification into artificial intelligence services makes the firm unique from competitors that focus solely on Bitcoin mining.
Optimism for Looming Improvement
While MARA is a market-performing rating, Bernstein acknowledges its strengths and potential areas for improvement.
Bernstein’s report acknowledges that Mathon Digital (MARA) ranks among the largest in terms of co-hosting scale and self-mining capacity. While MARA is among the leading Bitcoin producers, analysts consider it an improving story as it transitions to self-owned sites. The transition is poised to lower the reliance on hosting partners.
Bernstein analysts anticipate the mining margins to improve in Q4 2024, coinciding with the re-energized Bitcoin bull run. The analysts consider fresh institutional ETF flows to dictate the bull cycle.
The report expects mining firms to witness declining costs as they deploy advanced rig generation within their expanded facilities. This transition will lead to operating leverage.
Market Activity
Meanwhile, mining stocks have witnessed price uplifts today. Core Scientific (CORZ) leads the charge with an impressive 8.96% gain to test $10.09, Yahoo Finance data shows Iris Energy (IREN) is up 6.60% to change hands at $7.79. Marathon Digital (MARA) has surged by 5% to reach $16.24, lifting its market cap to $4.78 billion.
According to Yahoo Finance data, RIOT trails with a 4.04% gain to exchange hands at $7.99. Lastly, Bitfarms Ltd (BITF) shares the positive momentum with a 3.91% climb to $2.39.