Riot Platforms Shifts to AI Amid Bitcoin Downturn, Gains Support from Wall Street

JPMorgan and

have both raised their ratings for (RIOT), assigning overweight and buy recommendations, respectively. Their decisions are based on the miner’s recent move into artificial intelligence (AI) and high-performance computing (HPC), which they view as a major driver for future growth. Both institutions also increased their price targets: raised its target from $15 to $19, while Citigroup moved its target from $13.75 to $24. These upgrades come amid changes in the sector’s economic environment, with analysts pointing to Riot’s opportunity to benefit from HPC colocation and cloud service contracts as mining returns diminish. JPMorgan estimates there is a 50% chance that will secure short-term HPC contracts, referencing Core Scientific’s $3.7–$8.6 million per megawatt (MW) deals as a benchmark title1 [ 1 ].

This strategic shift has set Riot apart from its competitors. JPMorgan’s analysts described Riot as the “most compelling among its mining peers,” highlighting its potential for HPC growth and adaptability. Peter Christiansen of Citigroup cited Riot’s “accelerating transition to AI and HPC” as the main reason for the upgrade, noting the company’s ability to use its current infrastructure for demanding computing tasks title2 [ 2 ]. Following the ratings updates, Riot’s shares jumped 5.32% in pre-market trading to $17.63, outperforming a sector that saw significant declines due to shrinking mining profits title3 [ 3 ].

Riot’s move into AI and cloud computing is supported by its energy-efficient data centers, originally built for Bitcoin mining. Analysts project that HPC colocation agreements could bring in $4.8–$11.2 million per critical IT MW, while GPU cloud services could generate around $5.3 million per MW title4 [ 4 ]. These figures reflect a rising demand for computing power among businesses, a trend that has accelerated as Bitcoin mining becomes less profitable after the halving event. According to JPMorgan, Riot’s potential gains could reach 14%, surpassing competitors like IREN and CleanSpark, which face greater risks due to overestimated HPC opportunities title5 [ 5 ].

These upgrades contrast with downgrades for other leading miners. IREN and CleanSpark were downgraded to underweight and neutral, respectively, as JPMorgan expressed doubts about the likelihood of large HPC contracts. At the same time, Cipher Mining (CIFR) saw its price target raised to $12, and MARA Holdings kept its overweight rating but with a lower target. This split in analyst opinion reflects a growing divide in the industry: miners expanding into AI and HPC are gaining momentum, while those focused solely on mining are under pressure from valuation concerns title6 [ 6 ].

Despite these positive developments, Riot’s financial performance is mixed. The company has a market capitalization of $6.59 billion but reports a net margin of -17.5% and a three-year revenue growth rate of -19.7%. While its EBITDA margin of 86.54% indicates strong cash generation, analysts warn of ongoing liquidity issues due to a free cash flow yield of -23.76%. Additional concerns include insider share sales and a Piotroski F-Score of 1, pointing to operational challenges title7 [ 7 ]. Still, Riot’s Altman Z-Score of 3.6 and Beneish M-Score of -3.27 suggest a low risk of bankruptcy and little evidence of financial manipulation, providing some reassurance to investors title8 [ 8 ].

Riot’s strategic direction is further supported by broader market trends. More Bitcoin miners are adapting their energy-intensive facilities for AI applications, with companies like Core Scientific and TerraWulf experiencing notable gains in September. JPMorgan’s preference for “pure-play operators” fits this shift, as investors increasingly look for companies with scalable and diversified sources of revenue title9 [ 9 ].