JPMorgan assigned MARA (NASDAQ: MARA) an overweight rating on Wednesday, giving the bitcoin miner a $13 price target as the company leans further into AI/HPC services, according to a JPMorgan research note. The investment bank’s overweight rating rests largely on MARA unlocking new revenue streams via AI/HPC business lines.
JPMorgan analysts Reggie Smith and Charles Pearce noted that MARA has an opportunity to convert its Texas facilities in Granbury and Garden City to AI/HPC data centers. The Granbury location currently operates 230 megawatts of power. The Garden City site adds another 126 megawatts of operational capacity.
Analyst Reginald Smith estimates converting these sites for critical IT loads could generate $520 million in annual lease revenue using 250 MW of capacity. From this, MARA’s operating income could reach $440 million under a full colocation model.
The analysts note that AI and HPC loads can generate $17 million per megawatt, while the market currently values bitcoin mining sites at $1 million per megawatt.
MARA’s management previously dismissed any transition to AI/HPC infrastructure due to high capital intensity and execution risk. However, the company’s recent acquisition contradicts this talking point and provides MARA an immediate entry into the private cloud security sector. MARA finalized the transaction to acquire a 64% controlling stake in the French operator on February 20.
Looking forward to MARA’s Q4 results, which are forthcoming on Thursday, JPMorgan projected a 10.7% decline in fourth-quarter revenue to $225 million amid tightening pure-play mining economics. With bitcoin mining revenue compressed as Bitcoin prices hovers near $64,000, MARA is barely breaking even on a gross profit basis and faces a power cost per coin of $68,900, the report claims.
JPMorgan valued MARA’s core bitcoin mining operations at $1.3 billion, while valuing its bitcoin treasury at $4.8 billion.
