Short-selling institution Culper Research released a report stating that the mining site of mining company Iris Energy is not suitable for artificial intelligence or high-performance computing. As a result, the stock price of this Bitcoin mining company plummeted by 13%. In the report, Culper Research wrote:
Iris Energy Stock Price | Source: Google Finance
Analyst endorsement: AI and mining capital expenditure comparison is meaningless
However, another brokerage firm Bernstein’s research report disagrees with Culper Research’s bearish view. They first gave Iris Energy a “outperform” rating two days ago, even setting a target price of $26. And today, Bernstein continued to defend Iris Energy, stating that the company has never expressed an intention to transform its Bitcoin mining site for artificial intelligence purposes. On the contrary, the company has expanded most of its plans for Bitcoin mining, and the existing power and data center infrastructure of the Childress site is very suitable for Bitcoin mining.
Bernstein estimates that 65% of the company’s value comes from Bitcoin mining, while the remaining 35% comes from artificial intelligence/HPC, and completely disagrees with the view that mining activities have no value.
The report points out that Iris Energy’s potential advantage in artificial intelligence mainly comes from the 1.4 gigawatt site in West Texas with power interconnection, and the opportunity lies in monetizing land and power supply. Bernstein states that the current capital expenditure indicator of $1 million/megawatt reflects the capital expenditure of Bitcoin mining, and comparing it with AI/HPC capital expenditure is meaningless.
Bernstein states that Iris Energy’s valuation is consistent with other Bitcoin mining companies such as CleanSpark (CLSK) and Marathon Digital (MARA), and the entire valuation is driven by mining.
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