Riot Platforms (RIOT) stock rose about 8% on Friday after Advanced Micro Devices (AMD) expanded production capacity at its Rockdale, Texas, campus, underscoring Riot’s continued pivot from Bitcoin mining to AI and high-performance computing.
According to its first quarter financial results, AMD doubled its contracted capacity to 50 megawatts (MW) and exercised an option to potentially expand it to 150MW. Riot said the deal could generate about $636 million over 10 years, according to earnings records.
Riot also secured improved terms on its $200 million Bitcoin-backed credit facility with Coinbase, lowering the interest rate from 8.3% to a fixed 6.15% and releasing 1,544 pledged collateral Bitcoins, demonstrating the lender’s growing confidence in its expanding data center business.
Investors are paying a premium for the stock because of its partnership with AMD and improved credit terms. Matthew Siegel, head of digital asset research at VanEck, said: “The market is pricing in a lower cost of capital as more AMD deals increase lender confidence.”
Riot is one of the last few “pure” mining companies left that didn’t get into hosting AI computing, and other companies have opened up their data centers to exit mining. Until recently, activist investor Starboard began urging management to accelerate the transition from Bitcoin mining to AI infrastructure providers.
The move to expand its data center business to host AI computers appears to be paying off for the Castle Rock, Colorado-based company.
The company reported total revenue of $167.2 million for the quarter ended March 31, up from $161.4 million in the year-ago period, supported by $33.2 million in initial data center revenue. However, Bitcoin mining revenue decreased from $142.9 million to $111.9 million, mainly due to falling Bitcoin prices and increased mining competition. The company’s stock price has risen about 147% over the past 12 months, while Bitcoin has fallen nearly 17%.
The company held all of the Bitcoin it had mined to date, but Bitcoin sales are also accelerating. The company sold 3,688 shares, according to Bitcoin Treasury data. $BTC During Q1. The company’s sales at the end of March were 15,679 companies. $BTC and $282.5 million in cash.
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