Bernstein late Tuesday initiated coverage of data center operator Iris Energy and bitcoin miner Core Scientific, based partly on the contracted electrical supply for their data centers. IREN stock and CORZ shares rose Wednesday.
Bernstein noted, according to CoinDesk, that bitcoin miners are emerging as attractive partners to build out artificial intelligence data centers, due to their available electrical power supply and operating capabilities. The researcher sees the bitcoin-miner pipeline for available electrical power increasing to 12 gigawatts by 2027, up from the 6 GW secured today.
Meanwhile, bitcoin miners have an edge when it comes to the large utility interconnection backlog that is stalling many AI data center projects. Bernstein noted that miners provide a quick solution to potential partners needing to secure energy supplies.
The firm also expects that 20% of bitcoin miner's power capacity will pivot to AI by the end of 2027.
"Bitcoin data centers are ideal for retrofit due to high power density racks, cooling infrastructure and general data center operating capabilities," Bernstein wrote.
New Ratings
Bernstein initiated coverage of IREN stock and CORZ shares with outperform ratings.
The firm said Iris Energy has one of the strongest power pipelines among bitcoin miners, with more than 2 GW on tap, as well as muscular capabilities in data center operations. Bernstein forecasts 15% of Iris' power capacity will pivot to AI data centers, mostly on the co-hosting model. Iris Energy operates data centers that are fully powered by renewable energy and optimized for bitcoin mining and AI services. The firm has a $26 price target for IREN stock — 103% above where shares closed Monday.
Meanwhile, Bernstein said Core Scientific leads in the transition to a AI data center co-hosting model. The firm pointed to Core Scientific's 12-year, $4.7 billion contract with CoreWeave. Core Scientific in early June entered a 12-year agreement to provide infrastructure to AI-hyperscaler CoreWeave. CoreWeave on June 25 exercised its first option to expand the contract for additional infrastructure.
Core Scientific began trading on the Nasdaq again in January after emerging from a reorganization that wiped $400 million in debt off its balance sheet. The company initially went public in July 2021 via a SPAC merger with a $4.3 billion valuation - not too long before the crypto winter. Core Scientific filed for Chapter 11 bankruptcy in December 2022, but continued to operate and mine bitcoin while it sought a way to offload debt.
Bernstein has a $17 price target on CORZ stock. That is 77% above where shares ended on Monday.
IREN Stock And CORZ Action
IREN stock pared gains to 0.6% Wednesday, trading along its 10-day moving average. Shares jumped 5.5% premarket Wednesday. IREN stock soared 80.4% in 2024.
CORZ stock climbed 2.2% Wednesday, also working on a move back above its 10-day line.
The bitcoin miner has rallied 149% after a May breakout from an IPO base.
Other bitcoin miners reversed lower Wednesday after rising slightly in early trade. Hut 8 retreated 4.9%. Marathon Digital and CleanSpark eased a fraction.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
