Macquarie Begins Coverage of Crypto Miners

Macquarie has begun coverage on several notable cryptocurrency mining companies, including Marathon Digital Holdings, Core Scientific, CleanSpark, Riot Platforms, and Cipher Mining, granting them all Outperform ratings. This initiative complements their existing coverage of Iris Energy.

In a communication to clients, Macquarie emphasized that these companies are well-positioned to take advantage of the dynamic digital asset landscape, particularly as they diversify their operations to encompass AI and high-performance computing (HPC).

The firm identified two primary strategies within the crypto-mining sector. One strategy involves miners leveraging their access to power infrastructure by expanding into hosting services for non-crypto-related sectors, such as AI. Conversely, some miners choose to concentrate on accumulating Bitcoin, banking on optimistic price projections.

In many instances, growth in mining capacity, as well as land or GPU acquisition for HPC/AI, is being pursued through dilutive equity issuance, according to analysts.

Macquarie noted that Core Scientific and Iris Energy are distinguished for their early adoption of AI-related hosting solutions. Core Scientific has secured a leading position through a hosting arrangement with CoreWeave, making it well-situated to meet the rising demand for AI computing infrastructure, which could act as a significant growth catalyst.

Cipher Mining has made notable progress with the completion of its Odessa site, along with announcements that bolster both Bitcoin mining and HPC efforts. Analysts believe Cipher’s emphasis on power efficiency and scalability positions it for a near-term boost in profitability, assigning a target price of $6.

Riot Platforms continues to excel in Bitcoin cooling technology, benefitting from its vertically integrated operations, which include power and infrastructure management. Macquarie has established a $15 target price for Riot, acknowledging its potential for operational efficiency.

Lastly, Marathon Digital and CleanSpark are recognized for their extensive involvement in Bitcoin infrastructure and acquisition strategies, with target prices set at $22 and $20, respectively.