Bitcoin (BTC) Miners Faced a Challenging Year, But Bernstein Remains Optimistic

In a report released on Thursday, Bernstein analysts revised their models for major Bitcoin mining companies, reflecting shifts in hash rates, AI/high-performance computing (HPC) prospects

Bernstein remains optimistic on Bitcoin (BTC) miners, highlighting opportunities in artificial intelligence (AI) and favorable valuations, according to a report by the analysts.

What Happened: The Bernstein analysts adjusted their models for major Bitcoin mining companies, considering shifts in hash rates, AI/high-performance computing (HPC) prospects, and stable Bitcoin price forecasts.

The report highlights a growing institutional focus on miners' AI potential, contrasting with the lagging performance of miner stocks compared to Bitcoin's year-to-date correction.

"While we prefer to focus on the emerging opportunity in AI, we highlight that the Bitcoin miner stocks have seen a 20-40% decline in 2025e largely due to cheaper valuations and better-than-expected EBITDA projections for 2025e, which leads us to maintain Outperform ratings on several of the miners," the Bernstein note explains.

The analysts updated hash rate estimates, considering power reallocations toward AI/HPC and new contracts, leading to revised price targets for miners.

For Core Scientific (NASDAQ:CORZ), Bernstein set a price target of $17, down from a prior estimate but still offering a 150.3% potential upside from its March 19 closing price of $8.68.

The firm's confidence stems from CORZ's robust 590 MW data center contracts with CoreWeave, a significant player in AI computing.

"Almost 45% of CoreWeave's contracted power capacity is contributed by CORZ, highlighting this power dependence and putting to rest fears of an AI capex slowdown that triggered a 40% correction in CORZ's stock price and had peers trading down 20-30% ytd," the report mentions.

Riot Platforms (NASDAQ:RIOT) saw its price target decrease to $19 from $22, suggesting a 146.9% upside from $7.78, as the company allocates 600 MW of its 2 GW Corsicana site power portfolio towards AI/HPC uses, pausing Bitcoin mining expansion.

The analysts noted, "RIOT with its 2 GW power portfolio is attractively positioned, however, the stock would need a catalyst in form of progress of securing an AI co-location partner for the Corsicana site to be able to realise this potential value."

CleanSpark (NASDAQ:CLSK) and Iris Energy (NYSE:IREN) received Outperform ratings with price targets of $20 each, down from $30 and $26, respectively, considering higher industry hash rates squeezing market share and cash flows.

CLSK's target suggests a 170% upside from $8.01, while IREN's implies a 174.9% gain from $7.20.

Marathon Digital (NASDAQ:MARA), rated Market-Perform, holds a $23 target, up from its $12.53 close, offering a 153.7% upside.

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Why Is It Important: Bernstein's Bitcoin price forecast remains unchanged at $200,000 by Q4, providing a valuation floor for miners holding Bitcoin on their balance sheets.

The report highlights a 30% hash rate increase since April 2024's halving, putting pressure on production, and strategic pivots to AI/HPC are key model updates.

For CORZ, an additional 70 MW critical IT load contract with CoreWeave boosts its $10 billion revenue potential over 12 years, although delivery delays push significant HPC revenue to 2026.

"We value CORZ using SOTP approach with 2 major components – 1. EV of the Bitcoin mining business; 2. EV of the AI data center business, which we arrive at by applying a 15x multiple to 2025E EBITDA and factor in Capex for 2025-27E to get to EV in 2025e," the analysts explained, projecting AI/HPC to contribute 45% to CORZ's enterprise value by 2025.

The firm anticipates CORZ to double its critical IT load to 1.3 GW by 2027, fueled by existing site expansion and new acquisitions like a 66 MW facility in Auburn, Alabama.

The report elaborates on CORZ's power strategy, with 1.3 GW currently deployed across 10 U.S. sites, allocating 900 MW to AI/HPC and 400 MW to mining. Recent expansions, including 70 MW at Denton and Muskogee, highlight its execution edge.