Zinger Key Points
- JPMorgan analyst Reginald L. Smith calls Riot’s shift to AI at Corsicana “encouraging” for long-term growth.
- Riot’s pause in bitcoin mining expansion and reduced 2025 targets reflect a strategic pivot to AI.
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Riot Platforms Inc RIOT made a strategic pivot that is shaking up its future trajectory. The company announced it would pause its Bitcoin BTC/USD mining expansion at Corsicana and instead conduct a feasibility study on converting its remaining capacity to AI and high-performance computing (HPC) use.
This move has sparked a positive response from JPMorgan analyst Reginald L. Smith, who says he finds the decision “encouraging.”
Analyst Reaction: A Positive Shift For Riot
Smith has been advocating for Riot to explore AI at its Corsicana facility and this announcement aligns with his long-held views. In his report, he describes the move as "encouraging," noting that the feasibility study is an important step in Riot's potential future diversification.
The analysts’ stance reflects a growing belief that Riot could tap into a new revenue stream beyond the fluctuating world of cryptocurrency mining.
Read Also: Riot’s Crypto Mining Success Spurs Investor Interest With Defiance’s New ETF
Potential For AI Success At Corsicana
One of the key reasons behind Smith’s optimism is the Corsicana site's scale and location. Riot's 400 MW Corsicana facility is one of the few bitcoin mining sites in the country that meets the criteria for AI and HPC workloads.
The site is within 100 miles of major metro areas, which is crucial for high-latency AI applications. While there are no guarantees, Smith sees the opportunity as significant, especially as Riot accelerates its outreach to potential AI partners.
Impact On Riot's Bitcoin Mining Future
While Smith is bullish on the AI pivot, there are trade-offs. Riot is scaling back its 2025 bitcoin mining goals, lowering its hashrate target by 19% to 38.4 EH/s and cutting its capital expenditures for the year by $245 million.
These reductions reflect a shift in resources, but analysts remain hopeful that this new direction will pay dividends in the long run.
While the AI shift might bring short-term uncertainties, Smith's encouraging outlook suggests that this could be the beginning of a transformative phase for Riot Platforms.
Investors will be watching closely to see how the feasibility study unfolds.
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