Bernstein analysts caution that Core Scientific's reported 75% return on assets (ROA) from its AI deal is an outlier and not a template for other Bitcoin miners. While Core Scientific benefits from pre-existing infrastructure and power, other miners like TeraWulf and Cipher are projected to achieve significantly lower ROAs of 5% and 4% respectively from similar ventures. This suggests that the narrative of AI diversification as a universal boon for Bitcoin mining profitability may be overstated, potentially impacting investor sentiment and capital allocation within the sector. Investors should watch for further details on AI contracts and their true impact on miner financials.
This analysis challenges the prevailing optimism around Bitcoin miners diversifying into AI, suggesting that high returns are not easily replicable. It implies that capital expenditure and infrastructure advantages are key, which could lead to a re-evaluation of miner valuations and investment strategies focused solely on AI expansion.
The market is grappling with how to value Bitcoin miners beyond pure BTC production, with AI diversification emerging as a new narrative. This report highlights that not all miners are created equal in leveraging new opportunities, implying a growing divergence in sector performance and valuation based on specific operational advantages.
Bernstein pegs TeraWulf at 5% and Cipher at 4% stabilized ROA, calling Core Scientific's 75% figure a capex-advantaged outlier.