1. Riot Platforms, Inc. (NASDAQ:RIOT)
Average Upside Potential: 115.83%
Riot Platforms, Inc. (NASDAQ:RIOT) is a vertically integrated Bitcoin mining and digital infrastructure company. The company’s Bitcoin mining data center operations are based in central Texas and Kentucky while Denver and Colorado host the electrical switchgear engineering and fabrication operations. Riot company operates through two primary business segments including Bitcoin Mining and Engineering after the recent termination of the Data Center Hosting business.
Riot Platforms, Inc. (NASDAQ:RIOT) serves as an industry leader in vertically integrated Bitcoin mining. The firm ended the fiscal second quarter of 2024 with the self-mining hashrate deployed up 106% year-over-year. The firm’s core Bitcoin mining segment remained robust after recording strong gross margins despite the Bitcoin halving. Simultaneously, the Engineering segment returned to gross profit in the quarter and accounted for 14% of the total revenue. Riot also acquired the Kentucky Bitcoin miner Block Mining Inc. which has 60 MW of power capacity across two facilities.
The growth prospects for the Bitcoin miner remain bright. By the end of 2024, Riot expects to achieve a total self-mining hashrate capacity of 36 exahashes per second. The firm looks in a good position to accomplish this rate of growth after announcing the successful energization of the Corsicana Facility substation which will have a total capacity of 1 GW once it is fully developed. Such developed capacity will simply deem this facility the largest known Bitcoin mining facility in the world. At the same time, Riot Platforms, Inc. (NASDAQ:RIOT) has increased its 2024 deployed hashrate from 31 exahashes per second to 36 exahashes per second following the aforementioned acquisition of Block Mining.
For investors looking for a cheap investment, Riot is a good option as the stock is currently trading at 22 times its forward earnings, with a discount of 7.26% to the sector. With the company’s ongoing investment to raise its hashrate, scale up its Bitcoin mining business, a solid growth trajectory well set up, and a consensus buy rating, Riot ranks among the best Bitcoin and blockchain stocks to buy according to analysts.
While we acknowledge the potential of RIOT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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