Macquarie Initiates Coverage on Cryptocurrency Mining Companies

Macquarie has started coverage on major cryptocurrency mining firms such as Marathon Digital Holdings (NASDAQ:MARA), Core Scientific (CORZ), CleanSpark (NASDAQ:CLSK), Riot Platforms (NASDAQ:RIOT), and Cipher Mining (NASDAQ:CIFR), assigning Outperform ratings to all.

This initiative complements their existing coverage of Iris Energy (IREN).

In a note to clients, Macquarie highlighted that these companies are strategically positioned to benefit from the evolving digital asset landscape, especially as they begin diversifying into AI and high-performance computing (HPC).

The analysts identified two primary strategies within the crypto-mining sector:
1. Diversification into Non-Crypto Services: Some miners are leveraging their power infrastructure to host non-crypto-related services, including clients requiring AI processing.
2. Focus on Bitcoin Accumulation: Conversely, other miners are maintaining a focus on Bitcoin, relying on optimistic price predictions.

Typically, advancements in mining capacity and land/GPU acquisition for HPC/AI occur through dilutive equity issuance.

Macquarie noted that Core Scientific (CORZ) and Iris Energy (IREN) are notable for their proactive engagement with AI-related hosting. Core Scientific has a significant hosting deal with CoreWeave, enhancing its position in the growing demand for AI-powered infrastructure.

This strategy could be a trigger for substantial growth.

Cipher Mining (CIFR) is recognized for successfully launching its Odessa site and recent initiatives supporting both Bitcoin mining and HPC. Analysts foresee Cipher’s commitment to power efficiency and scalability leading to an imminent boost in profitability, setting a $6 target price.

Riot Platforms (RIOT) is acknowledged for its advancements in Bitcoin cooling technology and its vertically integrated operations that encompass power and infrastructure management, with a target price of $15.

Lastly, Marathon Digital (MARA) and CleanSpark (CLSK) are celebrated for their extensive engagement in Bitcoin infrastructure and acquisition tactics, with target prices of $22 and $20, respectively.