Iris Power shares slumped 14% after a brief vendor mentioned the corporate’s Childress website 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 website to AI.
Iris Power (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 website for synthetic intelligence (AI) or high-performance computing (HPC).
The corporate, nevertheless, has dedicated many of the deliberate growth on the website to bitcoin (BTC) mining, dealer Bernstein mentioned in a analysis report, and the present energy and information heart infrastructure there work very properly for that objective.
“Iris Power has not claimed it intends to retrofit its bitcoin mining website 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 Power comes principally from the 1.4 gigawatt West Texas website 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 Power’s present $1 million/megawatt capital expenditure metric is a mirrored image of bitcoin mining capex. Evaluating it to AI/HPC capex will not be significant.
The corporate’s valuation is in step with different bitcoin miners akin to CleanSpark (CLSK) and Marathon Digital (MARA), whose complete valuation is pushed by mining, the report mentioned.
Bernstein initiated protection of Iris Power earlier this week with an outperform score and $26 value goal. The shares closed at $11.20 on Thursday.
Learn extra: Bitcoin Miners Are Engaging Companions to Construct Synthetic Intelligence Knowledge Facilities: Bernstein
