Analyst Upgrades Riot For 'Best Relative Upside'; Foresees 134% Growth For Another Bitcoin Mining Stock

JPMorgan analyst, Reginald L. Smith, has upgraded Riot Platforms Inc RIOT to Overweight from Neutral. This upgrade comes on the heels of a promising forecast for Riot’s hashrate growth.

Smith has a Dec. 2024 price target of $15, implying an upside of 35% from current price levels. Smith’s analysis also indicated a potential surge of 134% in another Bitcoin mining stock’s price by December 2024.

Let’s first dive into the Riot investment thesis and reveal the stock with 134% potential.

Also Read: What’s Going On With Bitcoin Mining Stocks?

Riot Stock Offers The ‘Best Relative Upside’

Smith likes Riot's “unique combination of industry-leading power contracts, scale and liquidity.” He also thinks that Riot shares currently offer the “best relative upside” among the three largest and most liquid U.S.-listed mining stocks: CleanSpark Inc CLSK, Marathon Digital Holdings Inc MARA and Riot.

3 key catalysts that Smith sees boosting the stock from current levels are:

• Hashrate Surge: Riot Platforms is set to ramp up its hashrate substantially, targeting 9 EH/s in the coming months and an additional 10 EH/s in the latter half of 2024. This growth trajectory could propel Riot’s total hashrate to 31.5 EH/s by year-end.
• Smith also highlights RIOT’s unique strengths, such as industry-leading power contracts, scale, and liquidity (with approximately $600 million in cash and $470 million in bitcoin holdings).
• Investment Opportunity: Despite recent setbacks, including a 31% decline in share value over the past month, Riot presents a compelling investment opportunity. Although RIOT shares have dipped by 28% year-to-date, Smith remains optimistic about its future performance. With a potential uptick in hashrate growth expected as early as April/May, RIOT is primed for a rebound.
• Path to Growth: Riot’s roadmap to expansion is clearer compared to its competitors, as it aims to energize nearly 20 EH/s at its new 1GW Corsicana facility throughout 2024. This strategic move not only enhances Riot’s mining economics but also boosts its fleet efficiency.

Iris Energy: Most Exposed To AI & HPC Opportunities

Smith also underscores the bullish outlook on Iris Energy Ltd. IREN, another mining operator rated Overweight with a $10.50 price target. With the stock trading at $4.49 at the time of review, the analyst sees a 134% upside with the stock.

Australia-based Iris Energy is a smaller player in the space with a market cap of around $435 million. The company, founded in 2018, operates Bitcoin mining data centers. Iris Energy’s strategic positioning in renewable energy-powered data centers and its exposure to AI and HPC opportunities further solidify its investment appeal.

Another Bitcoin mining player highlighted by the report was Cipher Mining Inc CIFR. While assigning a Neutral rating to the stock, JPMorgan’s Smith hasn’t assigned a price target to it.

While there are risks associated with both RIOT and IREN, including Bitcoin price fluctuations and regulatory challenges, JPMorgan’s analysis remains bullish on their growth prospects.

JPMorgan’s endorsement of Riot’s potential for significant upside underscores the confidence in the Bitcoin mining sector’s resilience and future profitability.

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