Bitcoin (BTCUSD) and related assets are in focus today as investors flock to the “Trump trade,” but the potential for a second Donald Trump term isn’t the only reason investors should be eyeing this section of the market. Last week, Bernstein analyst Gautam Chhugani initiated coverage Core Scientific (CORZ) and Iris Energy (IREN) with an “Outperform” rating, explaining in an investor note that Bitcoin mining companies are positioned to participate in the artificial intelligence (AI) data center boom by leveraging their existing power infrastructure and operational capabilities.
According to Bernstein, miners control 6 gigawatts of power access, and will increase this number to 12 gigawatts by 2027, which is enough to power 9 million homes. The investment bank expects around a fifth of the power capacity for miners to pivot to AI by the end of 2027. Additionally, Chhugani expects that the growing adoption of Bitcoin and rising prices to help crypto mining stocks deliver outsized gains in the current cycle.
Let’s see why you should buy these two BTC mining stocks for AI data center upside.
Is Core Scientific a Good Buy Right Now?
Valued at $1.79 billion by market cap, Core Scientific (CORZ) is among the largest owners and operators of digital infrastructure for Bitcoin mining and hosting services in North America. Shares of Core Scientific went public in early 2024, and have more than tripled investors’ returns since its initial public offering.
Last week, CORZ secured high-performance computing (HPC) hosting contracts with CoreWeave for 270 megawatts of infrastructure, which represents a revenue opportunity of almost $5 billion over 12 years.
In Q2 of 2024, Core Scientific’s mining operations earned 1,680 Bitcoin, while its clients earned over 500 BTC. The company ended Q2 with 205,000 BTC miners in its data centers for both self-mining and hosting.
Each of the five analysts tracking Core Scientific stock has a “strong buy” recommendation. The average 12-month target price for CORZ stock is $14, about 25% above the current trading price.
What’s the Target Price for Iris Energy Stock?
Valued at $1.8 billion by market cap, Iris Energy (IREN) is a Bitcoin mining stock that trades 51% below all-time highs. However, higher BTC prices have helped the stock to surge 69.5% in the last 12 months.
The decline in profit margins following the Bitcoin halving event has forced mining companies to diversify their revenue streams. Bernstein says that Iris Energy has a solid power pipeline, and can allocate around 15% of its capacity towards AI data centers.
However, last Thursday, Iris Energy stock slipped over 13% on the day after short seller Culper Research questioned the company’s ability to serve high-performance computers that power generative AI platforms. Moreover, Culper noted that the company’s co-CEOs have been selling company stock for the first time since its IPO, as Iris Energy remains unprofitable and burned through $716 million in cash in the last four years.
Out of the nine analysts tracking Iris Energy stock, eight have a “strong buy” recommendation and one recommends “hold.” The average 12-month target price for IREN stock is $15.75, more than 31% above the current trading price.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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