Freeport-McMoRan stock tumbles after Trump imposes copper tariffs
Tuesday, RIOT Platforms (NASDAQ:RIOT) saw its price target reduced by Needham to $13.50 from the previous $16.00, while the firm upheld a Buy rating on the stock. The adjustment follows RIOT’s financial results, which showed a miss on adjusted EBITDA expectations despite meeting revenue forecasts. The shortfall was attributed to higher than anticipated selling, general, and administrative (SG&A) expenses, as well as other costs. However, the gap was narrower after accounting for $22 million in non-recurring legal and other expenses.
RIOT reported favorable power costs at 3.4 cents per kilowatt-hour, which was better than Needham’s estimate of 3.7 cents. The company has recently shifted its strategy, initiating an assessment of its Corsicana facility for its potential in artificial intelligence and high-performance computing (AI/HPC) applications. This move was announced in January, and despite recent comments from Microsoft (NASDAQ:MSFT) that could suggest industry challenges, RIOT management has indicated that their discussions with major cloud service providers have not decelerated. The company’s revenue grew 19.43% in the last twelve months, with analysts projecting 33% growth for the current fiscal year.
Needham reiterated its positive stance on the prospects of the Corsicana site for HPC use. The firm’s analysts believe that it remains an attractive option, even though it’s still early to draw conclusions. Nonetheless, the revised price target reflects concerns over the ongoing weakness in bitcoin prices and the persistently high global hash rate, which Needham views as potential obstacles for RIOT’s mining operations.
RIOT Platforms’ strategic pivot towards evaluating its Corsicana facility’s suitability for AI/HPC applications signifies the company’s agility in adapting to the evolving technological landscape. Despite the reduction in the price target, Needham’s continued endorsement with a Buy rating suggests confidence in RIOT’s long-term potential amidst the current industry headwinds.
In other recent news, Riot Platforms reported a strong financial performance for the fourth quarter of 2024. The company achieved a 34% increase in total revenue, reaching $376.7 million, and turned a net income of $109.4 million, a significant improvement from a net loss in the previous year. Revenue from Bitcoin mining surged by 70% to $321 million, highlighting the company’s robust growth in this sector. Riot Platforms also announced plans to expand its hash rate to 38 exahashes per second by the end of 2025, aiming to leverage its assets for further growth in high-performance computing and artificial intelligence sectors.
H.C. Wainwright maintained its Buy rating and a $17 price target on Riot Platforms, reflecting continued optimism about the company’s prospects. The firm emphasized Riot’s strategic initiatives in developing AI-focused data centers, particularly at its Corsicana, Texas facility, which could potentially host AI-focused data centers utilizing 600 megawatts of power capacity. Riot Platforms is actively exploring opportunities in the AI and high-performance computing space, with a feasibility study expected to conclude soon. The company is also enhancing its board and collaborating with financial advisors to optimize its market positioning.
Riot’s management is focused on maximizing shareholder value through strategic investments and expansions, including a $198 million capital expenditure plan for 2025. The company is engaging with hyperscalers for long-term contracts and exploring multiple tracks to capitalize on its energy assets. Riot Platforms’ strong balance sheet, featuring 18,221 Bitcoin as of January’s end, and its aggressive pursuit of AI and HPC opportunities are central to its strategy moving forward.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.