Why Bernstein Just Boosted Its Price Target for Bitcoin Miner IREN
Global investment firm Bernstein rated IREN as outperform and raised its price target to $125 after IREN announced a $9.7 billion cloud services deal with Microsoft. As part of the five-year agreement, IREN will provide Microsoft access to Nvidia's GPUs, showcasing how crypto miners can leverage their computing power for AI workloads. Recent deals between Bitcoin miners and major tech firms, such as Cipher Mining's agreements with Amazon and Google, highlight similar trends. IREN's shares rose over 2%, trading at $69, and have surged 1,000% in six months. However, experts highlight differences between crypto mining and AI infrastructure due to higher energy demands of AI. Meanwhile, Bitcoin's price fell to around $101,320, with mixed market predictions on its future valuation.
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Bernstein's Outperform Rating for IREN
Global investment firm Bernstein on Tuesday gave IREN an outperform rating and boosted its price target for the firm a day after the Bitcoin miner and data center company announced a $9.7 billion cloud services agreement with Microsoft. Bernstein analysts stated that this deal highlights how crypto miners can capitalize on the AI industry. The price target was raised to $125 per share, emphasizing that IREN's competitive advantage lies in its captive power access. At press time, IREN shares were trading at over $69, up roughly 2% during Tuesday trading, according to Yahoo Finance.
Details of the IREN-Microsoft Partnership
Sydney, Australia-based IREN will provide Microsoft with access to Nvidia's NVIDIA GB300 GPUs as part of the five-year deal. Bernstein remarked, "This deal reaffirms that Bitcoin miners find themselves in an advantageous position, led by their disproportionate 'power access' in a power-constrained world, providing them opportunities to maximize yield on their power interconnect." This partnership is seen as a pivotal development in showcasing how Bitcoin miners can pivot their resources towards supporting AI workloads.
Recent Industry Deals with Tech Giants
The IREN-Microsoft deal is part of a broader trend of partnerships between Bitcoin mining specialists and major technology companies. For instance:
- Cipher Mining recently signed a $5.5 billion, 15-year lease agreement with Amazon Web Services to provide turnkey space and power for AI workloads.
- In September, Cipher entered into a 10-year, $3 billion high-performance computing colocation agreement with Fluidstack, backed by Google.
- In August, Google increased its stake in Bitcoin miner Terawulf by providing an extra $1.4 billion backstop for project-related debt, raising its total stake to $3.2 billion.
Bitcoin Miners Pivoting to AI Infrastructure
Bitcoin miners typically operate large-scale facilities housing warehouses full of computers that process transactions on the crypto network. Leveraging their vast computing power, many miners are redefining their infrastructure to cater to growing AI demands. However, critics have pointed out that the high energy requirements of AI workloads make this pivot challenging, casting doubt on the compatibility of the two industries.
Bitcoin Market Performance and Predictions
Bitcoin was trading at about $101,320, reflecting a 5.8% drop over the past 24 hours, according to crypto market data provider CoinGecko. Over the past week, Bitcoin has fallen more than 11%. In the Myriad prediction market, more than 80% of respondents agree with crypto entrepreneur KBM, who predicts that Bitcoin will drop to $100,000, as opposed to trader Mando, who forecasts a rise to $120,000. Myriad is operated by Dastan, the parent company of the editorially independent publication, Decrypt.