Bitcoin miners are experiencing increased investor interest following Core Scientific’s AI deal with CoreWeave, according to a JPMorgan report.
Iris Energy is well-positioned to capitalize on the growing HPC/AI opportunity.
Investors are recognizing the alternative uses for mining facilities and the value of power access.
The bitcoin (BTC) mining sector has seen a surge in investor interest following Core Scientific’s (CORZ) deal with artificial intelligence (AI) company CoreWeave, JPMorgan (JPM) stated in a research report on Monday.
The report highlights that the total market cap of the 14 miners JPMorgan tracks has grown by 22%, or $4 billion, since the announcement, compared to a 7% decline for bitcoin and a 3% increase for the S&P 500 stock index. Core Scientific announced earlier this month that it had signed a 200 megawatts (MW) artificial intelligence deal with the cloud computing firm. This news led to a re-rating of the bitcoin mining sector as investors responded positively to the deal.
This shift reflects the “alternative (and potentially more accretive) use cases for mining facilities and the scarcity and value of power access,” analysts Reginald Smith and Charles Pearce wrote, adding that the Core Scientific deal “validates and will accelerate miners diversifying into high-performance computing (HPC) programs.”
Overweight-rated Iris Energy (IREN) is best positioned to take advantage of this opportunity, the report noted, highlighting that the company has excess power capacity and is not solely focused on bitcoin mining. Iris Energy was an early adopter of the HPC trend and is already running graphics processing units (GPUs) at its facilities. The firm has a strong track record of building and delivering high-quality data centers on time and has access to substantial power.
Neutral-rated Cipher Mining (IFR) has attractive power costs and a solid operational history, but has a smaller power pipeline compared to Iris Energy, the bank stated.
Riot Platforms (RIO), also overweight-rated by JPMorgan, “remains fully committed to bitcoin mining” and has shown little interest in HPC despite its significant power capacity.
Underweight-rated Marathon Digital (MARA) and neutral-rated CleanSpark (CLSK) “appear the most expensive on an enterprise to energized power basis,” the report concluded.