Analyst shares stark warning on surging crypto stock
BTC
WOULD
Riot Platforms (Nasdaq: HOOD) is a digital infrastructure company that made its name for Bitcoin (BTC) mining operations.
But since this business is no longer profitable, the company has been selling its Bitcoin holdings and transitioning to running artificial intelligence (AI) and high-performance computing (HPC) operations.
Related: What is Bitcoin mining? Explained
During the first quarter of the year, Riot sold 3,778 Bitcoin for $289.5 million and produced only 1,473 Bitcoin.
On Apr. 30, the company reported the financial results for Q1, in which it revealed posting $167.2 million in revenue, up from $161.4 million year-over-year (YoY).
Data center revenue stood at $33.2 million in its first quarter. Bitcoin mining revenue stood at $111.9 million this quarter, down from $142.9 million YoY.
Since the day the company released its earnings report, its stock has risen 14% and was trading at $19.68 at press time.
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Analyst trims RIOT stock price target
After the earnings release on Apr. 30, Roth/MKM analyst Darren Aftahi shared its rating on the RIOT stock the same day.
Aftahi lowered his price target on the stock from $42 to $38 while maintaining a "Buy" rating, Investing.com reported.
The analyst highlighted that though AMD expanded its capacity to 50 MW under the same lease economics, the lower capital expenditures make way for incremental HPC lease revenue.
Aftahi also highlighted the redesign at the company's Corsicana facility, where two shells become one with 168 MW CITL, compared to 112 MW for the same $214 million expenditure. It now translates to a total campus capacity of approximately 756 MW.
The analyst said the main catalyst for Riot is a formal Corsicana lease in H2 2026. But we are far from it yet, prompting Aftahi to trim the price target despite optimism.
Near-term AMD expansion and project financing would help de-risk future executions, as per the analyst.
Related: Analyst predicts 60% upside for Riot Platforms stock ahead of earnings
