bitcoin Mining Sector Receives Bullish Ratings from Investment Firm Bernstein
Investment firm Bernstein has made a bullish call on the bitcoin mining sector, issuing “outperform” ratings for four publicly traded companies: Riot Platforms, CleanSpark, IREN (formerly known as Iris Energy), and Core Scientific. These ratings indicate that Bernstein expects these stocks to outperform the broader market. Meanwhile, MARA (formerly known as Marathon Digital Holdings) received a “market-perform” rating, suggesting Bernstein anticipates performance in line with the market average.
Expansion and Efficiency Take Center Stage
Bernstein’s evaluation was based on five key factors: bitcoin (BTC) production, operational efficiency, energy consumption, cost, and artificial intelligence (AI) strategy. Riot Platforms stood out for its operational power capacity and ambitious expansion plans. Despite a broader industry slowdown in bitcoin mining production, Riot reported strong Q2 2024 results, generating $70 million in revenue. The company expanded its operations with a new Texas facility, acquired Block Mining for $92.5 million, and increased its Bitfarms stake to 18.9%.
CleanSpark garnered praise for its top-notch energy efficiency and high realized hash rate, a key measure of actual mining performance.
Beyond bitcoin
Bernstein expressed optimism regarding IREN’s expansion plans, including its two mega sites in Texas. Beyond bitcoin mining, the company’s potential in the AI sector is also promising, as evidenced by its partnership with Morgan Stanley to explore AI opportunities. Core Scientific also impressed analysts with its cost-efficiency and pioneering AI strategy. The report lauded the company’s “best in class” hashcost, attributed to low power cost, uptime, and controlled SG&A costs (SG&A stands for Selling, General & Administrative expenses).
Positive Outlook for bitcoin Mining
While MARA received a “market-perform” rating, Bernstein acknowledged its strengths and the fact that the company has improved its uptime efficiency by moving to a self-mining model. Analysts also expect the firm to fully transition to its own mining sites to reduce reliance on hosting partners. In terms of overall mining trends, the report predicts mining margins to improve in Q4 2024, potentially fueled by a potential bitcoin bull run driven by institutional investment inflows into spot bitcoin exchange traded funds (ETFs). According to analysts, mining costs are expected to decline as companies like MARA deploy the latest generation of rigs for expansion, leading to improved efficiencies.
