Bernstein Predicts Potential Upside in 12 Bitcoin Mining Stocks
Bitcoin miners with efficient and active power strategies have the potential for valuation re-rating, Bernstein analysts disclose.
Bernstein analysts firmly focus on the publicly-traded Bitcoin mining companies months after the April 19 halving event.
Bernsteins recent research note conveyed on Wednesday benchmarks a dozen Bitcoin mining companies. The note highlights that miners with enhanced power strategies and efficient operations have significant upside potential.
Bernstein analysts indicate that Bitcoin mining companies could lower their present 90% valuation discount. Similarly, the miners can narrow a similar disadvantage relative to the traditional data centers. However, doing so would involve optimizing power portfolios and deploying cutting-edge efficiency measures.
Bernstein Predicts Potential Upside in Mining Stocks
Bitcoin miners devoting themselves to active power strategy alongside power efficiency present a stronger case for re-rating their valuation, Bernstein analysts note.
The report spotlights the aggressive roadmap for hash rate expansion and power efficiency. Additionally, the report considers the capability of miners to leverage assets in Bitcoin mining and operations in AI data centers.
Bernstein analysts consider Nasdaq-listed Riot Platforms (RIOT) a key player alongside CleanSpark (CLSK). The pair are joined by Iris Energy (IREN) as favorites per the analysts’ note on Wednesday.
The report evaluates the effect of the next-generation mining chips and the BTC holding strategies. The analysts note significant upside potential for the miners to extract additional hash rates from the present portfolio. However, such necessitates upgrading the fleets to deploy recent-generation ASICs.
The analysts weighed the power efficiency and uptime to recognize Iris Energy (IREN) and CleanSpark (CLSK). While Core Scientific (CORZ) cannot match the power/uptime for the pair, it excels on data center uptime.
The analysts acknowledged the need for improvements by some miners. In particular, the analysts note that RIOT needs to improve efficiency and energize large power sites. The report illustrates that Marathon Digital’s (MARA) efficiency will improve as it nurtures its self-mining portfolio.
The report outlines the opportunity that the recent generation of mining chips presents. Bernstein considers such grants an opportunity for CORZ to enhance mining capacity and power the consumption ratio.
Bernstein extends the scope to the miners’ Bitcoin holdings. The analysis also features the selling strategies deployed by miners for the production of Bitcoin.
Bernstein observed considerable consolidation by CleanSpark, Marathon Digital Holdings, and Riot Platforms. The three miners hold substantial BTC on their balance sheets and dispose of a smaller percentage of units produced, unlike in 2023.
Comparatively, smaller and mid-scaler mining firms such as TeraWulf (WULF), Iris Energy, and Core Scientific typically fund their operations by selling nearly 100% of the Bitcoin production.
The report includes the potential harbored by Bitcoin miners pivoting towards AI data centers. The scope was featured in a report released at the onset of July.
Bullish Outlook for Bitcoin Mining Stock
The Bernstein analysts offered a bullish outlook for the Bitcoin mining stocks. Notably, they issued an outperform rating on Iris Energy with a target price of $26 second from CleanSpak $30.
A similar outperform rating is maintained on Riot Platforms at $22, while Core Scientific retains a $17 target price. However, the analysts gave Marathon Digital a market-perform rating with a $23 target price.
Beyond the mining stock, Bernstein analysts had offered a bullish outlook for Bitcoin earlier this week ahead of Donald Trump, who is addressing the annual conference on July 27.
The research firm noted on Monday that it considers the Bitcoin-affiliated stock to have significant upside potential. The Bernstein team under Gautam Chhugani observed that the crypto market is yet to factor in the widely anticipated shift in crypto regulation in Trump’s win.
While Bitcoin rebounded from the German sell-off, the largest crypto by market value changed hands in a $65,479.96 to $67,072.74 range per CoinGecko data. Nonetheless, Bitcoin is 10.85% below is peak price of $73,737.94, attained on March 14.
