Bernstein Projects 196% Upside for Riot Platforms, Raises Price Target to $22 Amid Bitcoin Mining Focus

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Bernstein Raises Riot Platforms Price Target To $22, Maintains Outperform Rating

On October 1, 2024, at 11:18 AM, Bernstein expressed a preference for Riot Platforms' focus on Bitcoin mining over AI projects. They see a quicker path to profitability with this strategy. Bernstein expects Riot's revenue to grow at a compound annual growth rate (CAGR) of 149.6% from 2023 to 2025, projecting an EBITDA of $1.1 billion.

The investment bank has assigned an “Outperform” rating to Riot Platforms (RIOT) with a price target of $22. This suggests a potential upside of 196% from the current price of $7.42.

What Happened: Bernstein's optimistic outlook stems from Riot’s dedicated approach to Bitcoin (BTC/USD) mining, strong power capacity, and advantageous positioning in the cryptocurrency market.

Riot is currently building the largest Bitcoin mining data center in Corsicana, Texas, aiming for a power capacity of 1 gigawatt (GW). By 2025, the company is expected to control 8% of the Bitcoin network, translating to an estimated hash rate of 57 exahashes per second (EH/s).

Bernstein analysts noted, “We believe a Bitcoin bull market is the immediate upside, and expect Bitcoin to touch a peak cycle high of $200,000 by the end of 2025.”

This emphasis on Bitcoin mining sets Riot apart from competitors diversifying into AI data centers. Bernstein favors Riot's decision to focus on Bitcoin mining, arguing that AI projects typically take 18 to 24 months to become profitable. Riot's innovative power strategy has also contributed to its positive outlook.

The report mentions that “Riot received approximately $70 million in power credits in FY23, around 25% of its total revenue,” highlighting the company's flexibility in managing its power costs.

Bernstein's assessment also highlights Riot’s financial strategy. The company's focus on vertical integration and self-mining capabilities gives it an edge, while avoiding hosting contracts.

Moreover, Riot’s flexible power strategy, including participation in demand response programs, is seen as reducing its overall cash cost for Bitcoin mining. Bernstein projects that Riot’s revenue will grow at a 149.6% CAGR from 2023 to 2025, with an expected EBITDA of around $1.1 billion in 2025.

The Dollar Is Weakening—Here’s Why That Could Be Good For Bitcoin: 10x Research

Market news and data brought to you by Benzinga APIs. Comments posted in: Cryptocurrency News, artificial intelligence, Bernstein, bitcoin mining.

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