Bitcoin Miner Iris Energy Double-Downs on Bitcoin Mining Despite Short Seller Criticism

Iris Energy Sticks to Bitcoin Mining Despite Criticism

Iris Energy (IREN) shares took a hit yesterday after a short-selling report from Culper Research questioned the suitability of the company's Childress, Texas site for artificial intelligence (AI) or high-performance computing (HPC).

However, Bernstein, a reputable brokerage firm, countered these claims, noting that Iris Energy has never stated intentions to retrofit its bitcoin mining site to AI.

Bernstein emphasized that the company has committed most of its planned expansion at Childress to bitcoin (BTC) mining, and the existing power and data center infrastructure is well-suited for this purpose.

The broker estimated that 65% of Iris Energy's value comes from bitcoin mining, with the remaining 35% attributed to AI/HPC. They firmly disagree with the view that bitcoin mining operations are valueless.

While the report acknowledged potential AI upside from the company's 1.4 gigawatt West Texas site, it stressed that the current focus and capital expenditure are primarily directed towards bitcoin mining. Comparing the company's valuation to other bitcoin miners like CleanSpark (CLSK) and Marathon Digital (MARA), whose entire valuations are driven by mining, Bernstein initiated coverage of Iris Energy with an outperform rating and a $26 price target.

This situation highlights the ongoing debate regarding the future of bitcoin mining and its potential for diversification into AI and other technologies.

While short-sellers raise concerns about the site's suitability for AI, Iris Energy and Bernstein remain confident in the value and potential of the company's bitcoin mining operations.