Industry shifts in crypto mining and AI data center capacity

Riot’s data center pivot

I find Riot Platforms’ transition toward AI data centers more important than their mining volume suggests because data center revenue hit $23.2 million in the second quarter. The company signed a 20-year lease for 191 MW of critical IT capacity at its Rockdale campus, which generates $9.1 billion in revenue over the initial term and allows for two five-year extension options. Total potential contract value reaches $16.1 billion if the tenant exercises both extension options. They also completed the 25 MW delivery to AMD on time and on budget following intense engineering work. Even so, JPMorgan analysts lowered the price target for Riot from $19 to $17 and valued the mining operations at approximately $1 billion. Analysts now expect a 600-MW colocation deal at the Corsicana development, which accounts for one-third of its approved power portfolio. This expansion follows a second quarter where total revenue hit $174.2 million. The company ended the period with $1.2 billion in liquid assets, including $548.9 million in cash. Bitcoin mining revenue was $113.7 million for the quarter, which is lower than the $140.9 million reported in the same period last year. Produced bitcoin reached 1,587 units, up from 1,426 in 2025. The average cost to mine one bitcoin was $49,912, which is higher than the $48,992 in 2025. Engineering revenue hit $37.3 million for the quarter.

Marathon versus CleanSpark

Marathon Digital is scaling its power capacity through a 1,200-acre land acquisition in Matagorda County, Texas, developed with Starwood Digital Ventures. This property provides up to 1 GW of grid capacity by October 2027 and scales to 2 GW by April 2028. This move targets the competition to secure gigawatt-scale power assets for high-performance compute workloads. Marathon’s energized hashrate of 72.2 EH/s grew 33% year-over-year. I would not expect the recent 18% stock rally to hide the fact that JPMorgan cut their price target to $13 from $20. Marathon also missed its Q1 2026 revenue estimate, reporting $174.6 million against a consensus of $184.21 million. This follows their pending $1.5 billion Long Ridge acquisition, a 505 MW gas plant in Ohio. CleanSpark maintains a strong position with 200 MW of critical-IT potential at its 285-MW Texas site, leading JPMorgan to upgrade the stock to Overweight with a $14 target. Do you think the massive energy requirements for AI will eventually cannibalize the mining margins for these companies?

Bitfarms and hardware efficiency

Bitfarms decided to exit Latin America to reinvest in North American infrastructure. The company agreed to sell the Paso Pe site in Paraguay to the Sympatheia Power Fund, which is managed by Singapore-based Hawksburn Capital, for up to $30 million. This transaction follows customary closing conditions and gives them $9 million upfront and up to $21 million over the next 10 months. CEO Ben Gagnon expects these funds to support the 2026 push into North American HPC and AI energy infrastructure. This follows a sale of a Yguazu site to Hive Digital Technologies last year. I see the profitability of specialized hardware shifting as network difficulty changes. The market shows high efficiency in newer models, like the Antminer S23 Hydro 3U which was released in January 2026.

I still find the Antminer S23 Hydro 3U the most efficient choice for professional operations.