Investment manager Bernstein maintains an overweight rating on the Bitcoin mining sector, citing growing partnerships between Bitcoin mining companies and AI data centers necessary to address power constraints. The firm's deal tracker registered a new AI-related deal every week in July, with combined deals exceeding 7.5 gigawatts or the contracted equivalent of $150 billion in multi-year contracts. Analysts attribute this trend to third-party computing capacity from Bitcoin miners becoming highly valuable as access to power remains the AI industry's primary bottleneck amid growing political pushback against building new US data centers.
Bitcoin Mining Companies Announce Major AI Infrastructure Deals in July
Bitcoin mining companies announced multiple AI infrastructure deals in July. MARA Holdings announced plans to acquire a Texas site with up to 2 gigawatts of capacity to expand its AI and digital infrastructure business. TeraWulf signed a 20-year data center lease with AI startup Anthropic, a deal the company said could generate roughly $19 billion in contract revenue. Bitcoin mining infrastructure company Bitdeer has also expanded into AI cloud services and high-performance computing.
Hut 8 and IREN Secure Multi-Billion Dollar Contracts
Hut 8 announced a 15-year, $9.8 billion lease for its AI data center campus. IREN disclosed $2.8 billion in cloud services contracts with AI developers. Seeking Alpha contributor The Curious Analyst said on Thursday that IREN is beginning to convert infrastructure advantage into contracted and more predictable revenue, adding that the biggest risk to the thesis is execution.
Bitcoin Mining Stocks Register Gains Following Deal Announcements
Bitcoin mining stocks logged double-digit gains on Monday after Hut 8 and IREN announced major AI infrastructure deals. On Thursday, most miner stocks were poised for gains based on premarket activity. HUT 8's shares were up 5.23%, IREN up 1.89% and TeraWulf up 1.49%. Sector tracking exchange-traded fund CoinShares Bitcoin Mining ETF (WGMI) was up 1.47% ahead of the Nasdaq open. Bernstein has an outperform rating on all of the stocks it named, except for MARA, which it rates as market perform.
Political Opposition Challenges AI Data Center Expansion
Bernstein's research note said that Bitcoin miners and third-party computing power providers will remain important for AI companies, as the construction of new data centers is facing growing bipartisan political pushback. On Wednesday, Texas Democratic Senate candidate James Talarico reportedly shared a proposal to create stronger local approval processes and to repeal tax breaks for AI data centers. In April, US Senator Ron Wyden shared concerns that AI data centers in his home state of Oregon could worsen water scarcity during persistent droughts. He said that large data centers can consume up to 5 million gallons of water per day and asked large data center operators to explain how they would reduce groundwater withdrawals to protect the local water supply. In March, President Donald Trump's administration published a Ratepayer Protection Pledge aiming to expand AI infrastructure without increasing electricity bills for households and small businesses. In January, several state governors published plans to expand the grid to meet the rapidly growing demand from AI data centers, but stated that new data centers should bear the costs they create, rather than shifting these to existing residential customers and small businesses.
FAQ
What AI infrastructure deals did Bitcoin mining companies announce in July?
Hut 8 announced a 15-year, $9.8 billion lease for its AI data center campus. IREN disclosed $2.8 billion in cloud services contracts with AI developers. MARA Holdings announced plans to acquire a Texas site with up to 2 gigawatts of capacity. TeraWulf signed a 20-year data center lease with AI startup Anthropic that could generate roughly $19 billion in contract revenue.
Why does Bernstein maintain an overweight rating on Bitcoin mining stocks?
Bernstein maintains an overweight rating citing growing partnerships between Bitcoin mining companies and AI data centers necessary to address power constraints. The firm's deal tracker registered a new AI-related deal every week in July, with combined deals exceeding 7.5 gigawatts or the contracted equivalent of $150 billion in multi-year contracts. Analysts said third-party computing capacity from Bitcoin miners remains highly valuable as access to power remains the AI industry's primary bottleneck.
What political challenges are AI data centers facing?
AI data centers are facing growing bipartisan political pushback. Texas Democratic Senate candidate James Talarico reportedly shared a proposal on Wednesday to create stronger local approval processes and repeal tax breaks for AI data centers. US Senator Ron Wyden shared concerns in April that AI data centers in Oregon could worsen water scarcity. In March, President Donald Trump's administration published a Ratepayer Protection Pledge aiming to expand AI infrastructure without increasing electricity bills. In January, several state governors published plans stating that new data centers should bear the costs they create rather than shifting these to existing customers.
