JPMorgan Updates Bitcoin Miner Outlook: Cipher, CleanSpark Upgraded, Others Trimmed
JPMorgan has recently published a revised assessment of the Bitcoin mining sector, elevating its ratings for Cipher Mining and CleanSpark, while simultaneously adjusting downwards its price forecasts for Marathon Digital Holdings and Riot Platforms. This strategic re-evaluation by the financial institution underscores a pivotal transition within the cryptocurrency mining industry towards high-power computing (HPC) applications. This shift aims to capitalize on burgeoning opportunities in AI-related infrastructure, moving beyond an exclusive reliance on conventional Bitcoin mining operations.
Analysts at JPMorgan, Reginald Smith and Charles Pearce, noted a significant trend where Bitcoin miners are entering a 'higher-conviction phase' concerning high-power compute transitions. This is evidenced by over 600 megawatts of long-term AI-focused agreements secured since late September. The banking giant projects that an additional 1.7 gigawatts of crucial IT capacity will be announced by the conclusion of 2026, which accounts for approximately 35% of the miners' authorized power capacity. This emphasizes the sector's unique capability to transform energy assets into enduring revenue streams from HPC services, providing a competitive edge over conventional mining models.
Cipher Mining saw its rating elevated from 'Neutral' to 'Overweight,' accompanied by an increase in its December 2026 price target from $12 to $18. This positive adjustment is attributed to Cipher's recent acquisition of 410-megawatt HPC contracts and a roughly 45% reduction in its share price from recent peaks, presenting an appealing entry point for investors. JPMorgan anticipates Cipher to secure around 480 megawatts of critical IT capacity by 2026, encompassing about 64% of its approved operational footprint. The firm also suggested that long-duration sites planned for 2028–2029 could command higher valuations, contingent on a successful full HPC transition by the company.
CleanSpark also received an 'Overweight' upgrade, with JPMorgan maintaining its $14 price target. This upgrade is largely due to the potential of approximately 200 megawatts of critical IT capacity at the company's new 285-megawatt Texas facility. This capacity was valued at about $13 million per megawatt, reflecting the enhanced revenue potential of high-density IT workloads. CleanSpark is emerging as a significant beneficiary of the HPC migration trend, with numerous large-scale operators reallocating portions of their power resources towards cloud computing agreements.
Conversely, JPMorgan adjusted its price targets for Marathon Digital Holdings and Riot Platforms downwards. Marathon's target was reduced from $20 to $13, primarily due to the impact of declining Bitcoin prices and an escalating network hashrate. The firm also cited Marathon's expanded fully diluted share count, a result of ATM issuances and convertible notes, leading to a reduction in the valuation of Marathon's mining business from approximately $2.5 billion to $1.3 billion. Similarly, Riot Platforms' target was lowered from $19 to $17. Analysts project that Riot's Corsicana site will incorporate a 600-megawatt colocation agreement, covering roughly one-third of its approved power capacity, and consequently, the valuation of Riot's mining business was adjusted to about $1 billion, indicating a more conservative outlook.
This comprehensive recalibration of Bitcoin miner valuations by JPMorgan illustrates a broader industry movement. Companies are increasingly diversifying their operations by integrating high-power computing capabilities. This strategic shift is driven by the allure of more stable and lucrative long-term revenue streams from AI and cloud services, offering a significant evolution from the volatile, Bitcoin price-dependent traditional mining model.