Bitcoin Mining Stocks IREN, RIOT, and MARA Slide as AI Pivot Faces Fresh Headwinds – Riot Platforms (NASD
Top Bitcoin (CRYPTO: BTC) mining stocks that pivoted to the artificial intelligence (AI) infrastructure sector have pulled back sharply amid slowdown and competition headwinds.
Bitcoin Miners Pivoting to AI Face Competition Headwinds
These Bitcoin mining companies are also facing substantial competition from the larger neocloud companies like CoreWeave and Nebius, which have received backlogs worth over $99 billion and $50 billion, respectively.
Most Bitcoin mining companies, including Hive Digital, Core Scientific, Hut 8, TeraWulf, Cipher Mining, and Bitfarms, have all entered the scene, raising competition concerns.
This is likely one of the key reasons these stocks continue to attract high short interest. IREN’s short interest stands at 18%, while Core Scientific, TeraWulf, Riot Platforms, and MARA all have short interest above 15%.
High Data Center Deployment Costs
The companies are also seeing elevated costs, as the prices of GPUs, servers, and memory products have soared. High Bandwidth Memory (HBM) prices have soared by over 50% in the past few months. The same is true with CPUs, GPUs, and servers.
As a result, the companies are having to sell some of their Bitcoin holdings to fund the growth. They are also relying on debt and at-the-market (ATM) offerings to raise cash. A recent report by VanEck found that these companies face a $50 billion funding gap, and that they will need over $221 billion in the long term.
A good example of this is CoreWeave, which has boosted its outstanding shares from 317 million during its IPO to 428 million today. Its total debt has jumped to $35 billion from $11.8 billion during its IPO.
These Bitcoin mining companies will need to raise all this capital at a time when there are signs that AI growth is starting to ease. For example, OpenAI is considering postponing its IPO, while the price of AI tokens has slumped.
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