Investment bank Bernstein has issued an ‘Outperform’ rating for Riot Platforms (RIOT), projecting a 196% upside from its current price of $7.42. This optimistic outlook hinges on Riot’s strategic focus on Bitcoin mining, its impressive power capacity, and its strong position within the cryptocurrency market.
Bernstein’s bullish forecast is underpinned by Riot’s commitment to building the world’s largest Bitcoin mining data center in Corsicana, Texas. This facility, slated to achieve a 1-gigawatt (GW) power capacity, positions Riot as a leading player in the Bitcoin mining landscape. By 2025, the company is expected to control a substantial 8% of the Bitcoin network, translating to an estimated 57 exahashes per second (EH/s) of the network’s hash rate.
In addition to Riot’s extensive power capacity, Bernstein analysts anticipate a favorable market environment for Bitcoin, predicting a peak cycle high of $200,000 by 2025.
While some of Riot’s peers diversify into AI data centers, Bernstein favors Riot’s unwavering focus on Bitcoin mining, arguing that the AI market requires a longer gestation period for profitability.
Riot’s dynamic power strategy further enhances its positive outlook. The company’s ability to manage its power costs effectively is evident in the $70 million in power credits it received in fiscal year 2023, accounting for approximately 25% of its total revenue.
Bernstein’s assessment also highlights Riot’s financial strategy, which emphasizes vertical integration and self-mining capacity, providing a competitive edge. The company’s decision to avoid entering into hosting contracts demonstrates a commitment to maintaining control over its operations.
Furthermore, Riot’s flexible power strategy, including its participation in demand response programs, is seen as a key factor in reducing its all-in cash cost for Bitcoin mining.
Looking ahead, Bernstein projects Riot’s revenue to soar at a 149.6% compound annual growth rate (CAGR) from 2023 to 2025, with an estimated EBITDA of $1.1 billion in 2025. This combination of strategic focus, substantial power capacity, and strong financial management positions Riot Platforms as a compelling investment opportunity in the rapidly evolving cryptocurrency market.
