Investors are eyeing revenues from artificial intelligence computing and chip-making in top Bitcoin mining stocks’ fourth quarter earnings releases, according to several analyst notes reviewed by Cointelegraph.
Miners’ non-core business lines are taking center stage as the network’s April 2024 halving erodes Bitcoin (BTC) mining revenues.
Bitcoin miners Riot Platforms (RIOT) and Bitdeer (BTDR) report earnings on Feb. 24 and 25, respectively. Marathon Digital (MARA) and Core Scientific (CORZ) both report earnings on Feb. 26.
In November, Riot, Bitdeer and Marathon reported lower-than-expected earnings as they grappled with lower post-halving BTC mining margins.
Every four years, the number of BTC mined per “block” — a bundle of transaction data stored on the blockchain — is reduced by half. The April event reduced mining rewards from 6.25 BTC to 3.125 BTC per block.
However, analysts are optimistic that adjacent business lines — including leasing out high-performance hardware to AI models and selling specialized ASIC microchips — will more than offset any revenue losses.
Bitdeer has created a new business line selling its specialized hardware. Source: H.C. Wainwright
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Adjacent business lines
Analysts at H.C. Wainwright & Co said they were “encouraged to hear that demand for [Bitdeer’s] first internally developed ASIC available to external customers has been strong out of the gate” during the company’s third-quarter earnings call in November.
They rated Bitdeer’s stock a “buy,” citing the miner’s “overlooked” potential to disrupt the ASIC chip market, and raised its price target to $18. As of Feb. 24, BTDR trades at around $13 per share, according to data from Google Finance.
In January, Riot “lowered its 2025 hashrate outlook for the second time since October 2024, as management has decided to halt… [planned BTC mining expansions] to evaluate the feasibility of utilizing the remaining capacity at the site for AI/HPC,” referring to AI and high-performance computing services, the analysts said in a January note.
Riot is also rated as a “Buy,” with a $17 price target — significantly higher than RIOT’s $10 share price as of Feb. 24, according to data from Google Finance.
Meanwhile, larger miners are seeking to cut costs by scaling capacity, including by acquiring power supplies and data centers. Bitdeer plans to spend $100 million to build an in-house power plant and data center in Alberta, Canada, the H.C. Wainwright analysts said in February.
In November, Marathon executives vowed to “further expand and diversify our portfolio of owned and operated sites, which we expect to yield significant cost savings,” according to the miner’s Q3 earnings call.
Bitcoin miners could generate significant value by servicing AI apps. Source: VanEck
Lucrative synergies
Demand for computational power for AI models is surging, creating opportunities for Bitcoin miners.
“The synergy is simple: AI companies need energy, and bitcoin miners have it,” according to an Aug. 16 report by Matthew Sigel, fund manager VanEck’s head of digital assets research.
“[E]xisting bitcoin miners are uniquely equipped to support AI [and high-performance computing (HPC)] immediately,” Sigel said.
In December, activist investor Starboard Value reportedly took a stake in Riot to pressure the miner to diversify into serving demand from AI models for high-performance computing.
In February, Riot announced a shakeup of the company’s board of directors and plans to start a formal review of AI opportunities for the business.
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Cointelegraph by Alex O’Donnell