Investing.com — JPMorgan shuffled its ratings on U.S.-listed bitcoin miners, flagging risks around inflated valuations at Iris Energy or IREN and limited upside at CleanSpark, while highlighting Riot Platforms as offering the best value.
The bank upgraded Riot to Overweight from Neutral, cut IREN to Underweight from Neutral, and lowered CleanSpark to Neutral from Overweight. Cipher Mining remained Neutral.
Price targets were lifted for miners with high-performance computing (HPC) exposure, with Riot raised to $19 from $15, Cipher to $12 from $6, and IREN to $24 from $16.
While targets for Marathon Digital and CleanSpark were trimmed to $20 and $14, respectively.
Analysts said new colocation and cloud services opportunities could reshape the sector, citing Cipher’s $3 billion 10-year deal with Fluidstack and IREN’s push into GPU-powered cloud computing.
“We are upgrading RIOT to Overweight (from N), and moving to Underweight IREN (from N) and Neutral CLSK (from OW),” JPM analyst wrote.
IREN, which has surged more than 100% in the past month, is seen as pricing in an outsized colocation agreement at its 2 GW Sweetwater site.
JPMorgan warned such a deal, which would exceed $10 billion in capital costs, would be “record scale” and create more near-term downside risk than upside.
By contrast, Riot was judged to be trading at just 38% of JPMorgan’s upside case for HPC deals. “We see the most relative upside at Riot (+14%),” the analysts said.
Bitcoin miners have faced margin pressure this year from rising network hashrates and weaker mining economics, but JPMorgan said high-quality colocation contracts can be worth $3.7 million to $8.6 million per megawatt, while GPU cloud services carry even higher potential returns.
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