Iris Vitality shares slumped 14% after a brief vendor mentioned the corporate’s Childress web site was unsuitable for internet hosting synthetic intelligence or high-performance computing.
Bernstein notes that the corporate by no means mentioned it meant to retrofit the bitcoin mining web site to AI.
Iris Vitality (IREN) shares fell virtually 14% yesterday following the publication of a short-selling report by Culper Analysis that famous the unsuitability of the bitcoin miner’s Childress, Texas web site for synthetic intelligence (AI) or high-performance computing (HPC).
The corporate, nonetheless, has dedicated a lot of the deliberate enlargement on the web site to bitcoin (BTC) mining, dealer Bernstein mentioned in a analysis report, and the prevailing energy and knowledge heart infrastructure there work very properly for that goal.
“Iris Vitality has not claimed it intends to retrofit its bitcoin mining web site in Childress to AI,” analysts led by Gautam Chhugani wrote.
The dealer additionally estimates 65% of the corporate’s worth is derived from bitcoin mining and the remaining 35% from AI/HPC. Bernstein mentioned it utterly disagrees with the view that the mining exercise is worthless.
Potential AI upside for Iris Vitality comes principally from the 1.4 gigawatt West Texas web site that has an influence interconnect, the report mentioned, and the chance lies within the monetization of the land and the facility provide.
The dealer mentioned Iris Vitality’s present $1 million/megawatt capital expenditure metric is a mirrored image of bitcoin mining capex. Evaluating it to AI/HPC capex isn’t significant.
The corporate’s valuation is in step with different bitcoin miners similar to CleanSpark (CLSK) and Marathon Digital (MARA), whose total valuation is pushed by mining, the report mentioned.
Bernstein initiated protection of Iris Vitality earlier this week with an outperform ranking and $26 value goal. The shares closed at $11.20 on Thursday.
Learn extra: Bitcoin Miners Are Enticing Companions to Construct Synthetic Intelligence Knowledge Facilities: Bernstein