Bitcoin mining company stock prices soar, AI data centers become new growth engine

Bitcoin mining companies are experiencing a dual benefit, with their stock prices soaring due to the rise in cryptocurrency prices and a strategic shift towards artificial intelligence (AI) infrastructure. This not only boosts short-term market sentiment but may fundamentally reshape their long-term investment value.

Driven by the recent peak in Bitcoin prices and news of business diversification, several Bitcoin mining company stocks saw significant gains in pre-market trading on Tuesday. Among them, Bitfarms and Iren led the way, with increases of 11.85% and 11.60%, respectively; Hive Digital Technologies rose by 6.82%, TeraWulf by 3.68%, and CleanSpark and BitFuFu also recorded varying degrees of gains.

The direct drivers of this rally are evident. On one hand, the strengthening of Bitcoin prices directly enhances the profitability and asset value of mining companies. On the other hand, the market is increasingly focused on these companies' expansion into the AI data center sector, opening up a new growth curve independent of the cryptocurrency cycle.

This strategic transformation is gaining close attention from Wall Street. Analysts believe that the ready power and infrastructure owned by Bitcoin mining companies give them a unique advantage in meeting the explosive power demands of the AI industry. This shift could trigger a reevaluation of these companies' value, transforming them from mere cryptocurrency concept stocks into key digital infrastructure providers.

AI Power Bottleneck Highlights Unique Value of Mining Companies

The explosive growth of artificial intelligence is creating an unprecedented demand for electricity, and power supply has become a hard constraint on the industry's development. Morgan Stanley noted in a research report that the U.S. could face a power shortfall of up to 45 gigawatts (GW) for data centers between 2025 and 2028.

The report analyzed that new power projects typically require several years from approval to grid connection, making it difficult to meet the urgent needs of the AI industry. "Accessing power" has become the primary reason for delays in data center projects. In this context, the unique value of Bitcoin mining companies is highlighted. They possess the core assets most valued by AI companies: approved grid connections and large-scale power supply capabilities, allowing them to bypass the lengthy approval processes.

Morgan Stanley believes that for AI companies seeking rapid deployment of computing power, Bitcoin mining companies are the "fastest way to obtain power with the lowest execution risk."

Undervalued "Power Assets": Huge Potential for Valuation Reconstruction

Currently, many Bitcoin mining companies' valuation logic is still primarily based on their mining operations, but the market may be underestimating their intrinsic value as "power assets." Morgan Stanley emphasizes that "Enterprise Value/Watt" (EV/Watt) is a key but overlooked metric for assessing the value of such companies.

Data shows that U.S. Bitcoin mining companies have approximately 6.3 GW of large-scale sites in operation, with another 2.5 GW under construction. The report points out that many mining companies' current "Enterprise Value/Watt" is far below their potential value as data center infrastructure, providing investors with a significant value mismatch and potential Alpha opportunity Transforming these sites into AI data centers aligns well with the timeline for improving the power infrastructure of Bitcoin sites, providing ready-made solutions for AI companies.

From Mining to Computing Infrastructure: Analyzing the Value Creation Model

Transforming Bitcoin mining farms into high-performance computing (HPC) data centers can create significant economic value. Morgan Stanley conducted an analysis using a value creation model that assumes a mining company converts a 100-megawatt site into a "powered shell" data center (i.e., providing space, power, and cooling, but excluding chips and servers), which is then leased long-term to clients.

The analysis shows that if the tenant is a large cloud service provider (Hyperscaler), the project could create approximately $5.19 per watt in equity value; if the tenant is an emerging cloud service provider (Neocloud), the equity value created could be even higher, reaching about $7.81 per watt.

The report indicates that this value creation potential of approximately $5 to $8 per watt is significantly higher than the current trading levels of many Bitcoin mining stocks. Furthermore, this business model typically employs project financing, has high leverage, and avoids the technical and commercial risks associated with directly holding chips, making it attractive to all parties involved