Investors may be significantly underestimating the value of Bitcoin (BTC) mining companies that have pivoted toward artificial intelligence data centers. According to Compass Point analysts M
Investors may be significantly underestimating the value of Bitcoin (BTC) mining companies that have pivoted toward artificial intelligence data centers.
According to Compass Point analysts Michael Donovan and Ed Engel, the Bitcoin miners should be increasingly assessed like landlords generating steady rental income from long-term AI leases.
To test that thesis, Compass Point estimated the future rental income tied to already-signed contracts, net of remaining construction costs, then compared that figure to each company's enterprise value, as per CoinDesk.
The goal was to isolate how much of a company's valuation reflects contracted business versus speculative future development that hasn't yet secured tenants.
Related: Analysts send blunt warning to Bitcoin miners
Bitcoin miners like Applied Digital (NASDAQ: APLD), TeraWulf (NASDAQ: WULF) and Cipher Digital (NASDAQ: CIFR) showed the largest gap between contracted business and current valuations, according to the report.
This suggests the market is assigning little value to the additional AI capacity these companies have yet to lease.
Core Scientific (NASDAQ: CORZ) and Riot Platforms (NASDAQ: RIOT) stood apart for different reasons. Core Scientific's existing contracts are largely already priced in. This means further upside depends on new customer signings.
Meanwhile, Riot is valued more on the promise of its Corsicana campus and broader pipeline than on current contracted income.
Compass Point said the next two years will mark a turning point as these companies shift from announcing AI infrastructure deals to actually delivering them.
Trending on TheStreet RoundtableAs facilities come online and tenants begin paying rent, investors should get a clearer view of the recurring cash flow these sites can generate, unlike Bitcoin mining revenue, which fluctuates with crypto prices.
The former-miner-to-AI-data-center trade has already been one of the market's strongest AI-adjacent stories over the past year. However, returns have varied as investors weigh construction timelines, financing needs and the pace of leasing.
Following recent pullbacks across the group, Compass Point said the market may now be entering a phase where execution, not announcements, determines how these stocks are valued.
Related: Bernstein unveils outperform-rated miners to buy before bitcoin halving
