Friday, Piper Sandler reaffirmed its Overweight rating on Riot Platforms (NASDAQ:RIOT) with a steady price target of $23.00, aligning with the broader analyst consensus that remains bullish on the stock. According to InvestingPro data, analyst targets range from $13 to $25, with the stock showing strong momentum, gaining over 27% year-to-date. The firm's analysts noted Riot's recent move to explore artificial intelligence and high-performance computing (AI/HPC) possibilities at its Corsicana location. The company, which is primarily known for its Bitcoin mining operations, announced earlier in the week its plans to assess the potential for developing 600 megawatts (MW) of unused capacity for AI/HPC applications.
This development aligns with a January 15 report by Piper Sandler that pointed to a significant opportunity for Riot to capitalize on its available power capacity. The report suggested that utilizing the Corsicana site for AI/HPC tenants could substantially increase earnings for Riot Platforms. The recent actions by Riot Platforms follow the disclosure of a major stake in the company by an activist investor and a noticeable shift in management's stance towards embracing AI/HPC deals.
According to Piper Sandler's analysis, if Riot Platforms were to convert the 600 MW site into an AI/HPC data center, it could potentially add approximately $6.73 per share in value. This figure represents about 52% of the stock's closing price the day before the reiteration of the Overweight rating. The analysts' assessment underscores the potential financial impact of such a strategic pivot for Riot Platforms. The company's financial position appears solid, with InvestingPro analysis showing more cash than debt on its balance sheet and a healthy current ratio of 5.68. Revenue growth forecasts suggest a 33% increase for the current fiscal year, though investors should note the company's high earnings multiple.
Riot Platforms' exploration of AI/HPC opportunities comes at a time when the demand for data center capacity is growing, driven by the increasing needs of AI technologies and high-performance computing across various industries. The company's proactive approach to evaluating its Corsicana site for these purposes could position it favorably within the emerging technology sector.
The Piper Sandler team's reiteration of the Overweight rating signals confidence in Riot Platforms' ability to leverage its resources and align with market trends. The $23.00 price target reflects the firm's optimistic outlook for the stock's performance as Riot Platforms continues to navigate the dynamic tech landscape. For deeper insights into RIOT's valuation and growth prospects, InvestingPro subscribers can access 14 additional ProTips and a comprehensive Pro Research Report, offering expert analysis of the company's financial health, which currently rates as FAIR with a score of 2.35.
In other recent news, Riot Platforms has experienced significant developments. The company's Bitcoin production increased by 4% in December 2024, with its holdings rising to 17,722 Bitcoins, marking a 141% increase from the previous year. Riot Platforms also entered into a prime broker agreement with Coinbase (NASDAQ:COIN), and raised $594.4 million through an offering of 0.75% convertible senior notes due 2030. Additionally, plans to raise $500 million through a private offering of convertible senior notes due 2030 have been announced.
Riot Platforms also reported a strategic shift towards high-performance computing (HPC) initiatives, leading to Needham analysts lifting the stock's price target from $11.00 to $16.00, and maintaining a Buy rating. Meanwhile, JPMorgan (NYSE:JPM) reaffirmed an Overweight rating and a $16.00 price target, and Piper Sandler initiated coverage with an Overweight rating and a price target of $23.00.
Lastly, Riot Platforms has paused its Phase II Bitcoin mining expansion to explore artificial intelligence opportunities, leading to a downward revision of its 2025 self-mining hash rate capacity target and a projected reduction of $245 million in capital expenditures. These are the recent developments for Riot Platforms.
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