Bernstein analysts see upside in two little-known Bitcoin mining companies, citing their strategic shift toward hosting artificial intelligence (AI) data centers.
In a note, the firm initiates coverage of Iris Energy (IREN) and Core Scientific (CORZ) with Outperform ratings.
Bernstein highlights the hybrid business model of miners, who leverage their existing Bitcoin mining infrastructure for AI data centers. They point to recent deals, such as CORZ’s $4.7 billion co-hosting deal with Coreweave, as evidence of this trend.
“Bitcoin miners enjoy a leading position in the ‘large load’ power interconnection queue,” Bernstein says, giving them a significant advantage in building AI data centers. This, combined with their competitive energy costs, positions them well for partnerships.
Analysts predict that 20% of Bitcoin mining power capacity will be used for AI by 2027, with IREN, CORZ and other similar players leading the charge.
Bernstein remains bullish on Bitcoin, predicting a price of $200,000 by 2025 and surpassing $1 million by 2033. However, he sees the AI data center as a buffer against Bitcoin price volatility, which could attract more institutional investors.
The report compares IREN and CORZ, highlighting CORZ’s leadership in co-organization arrangements, while IREN has a strong energy project pipeline and data center expertise. Bernstein values IREN and CORZ at a target enterprise value (EV) to EBITDA of 9.7x and 6.4x for fiscal year 2025, respectively.
“If energy is the primary constraint, then Bitcoin miners' access to energy appears undervalued,” Bernstein concludes. He believes the current market underestimates the potential of these companies in the burgeoning AI data center space.
