J.P. Morgan has recently updated its ratings and price targets for several prominent bitcoin miners, signaling a strategic shift in its analysis of the sector. Notably, the firm has upgraded Riot Platforms (NASDAQ: RIOT) to an overweight status, while downgrading IREN (NASDAQ: IREN) to underweight and CleanSpark (NASDAQ: CLSK) to neutral. This re-evaluation is based on the potential growth opportunities associated with high-performance computing (HPC) colocation and cloud services.
According to a report released on September 26, J.P. Morgan has raised its price targets for miners that are starting to tap into HPC services, a move that reflects an optimistic outlook on these companies’ capabilities. Specifically, the target price for IREN has increased from $16 to $24, while Cipher Mining (NASDAQ: CIFR) saw its target jump from $6 to $12. For Riot, the target has been adjusted from $15 to $19. Conversely, J.P. Morgan lowered the price targets for CleanSpark from $15 to $14 and for Marathon Digital Holdings (NASDAQ: MARA) from $22 to $20. These targets are set with an extended view reaching out to December 2026.
J.P. Morgan has assigned a 50% probability that leading miners will secure new colocation deals based on available excess power capacity. This assessment references Core Scientific’s significant ~800 MW agreement with CoreWeave as a benchmark for assessing single-tenant demand in the sector. In this light, Riot stands out with a potential relative upside of approximately 14%. In contrast, IREN appears to be fully accounting for a notable-scale Sweetwater deal, which could expose it to greater downside risk in the short term.
Additionally, J.P. Morgan has estimated the value of HPC colocation contracts to range between $3.7 million and $8.6 million of equity per gross MW, or between $4.8 million and $11.2 million per critical IT MW, while putting the estimate for GPU cloud services at around $5.3 million of equity per MW. These figures serve as foundational metrics for the updated valuations and highlight the increasing enterprise demand not only for traditional bitcoin-mining operations but also for advanced compute capacities that HPC services offer.
The evolving landscape of the bitcoin mining industry, underscored by technological advancements and shifting market dynamics, has prompted these reassessments, reflecting a broader recognition of the growth potential linked to cloud computing and resource optimization.
