Bernstein said he remains overweight in the Bitcoin mining sector, citing growing partnerships between Bitcoin mining companies that are necessary to address artificial intelligence (AI) data center power constraints.
The Bitcoin mining industry’s investment management trade tracker recorded a fresh AI-related deal every week in July, with total deal value of more than 7.5 gigawatts, or the contracted equivalent of $150 billion in multi-year contracts, according to a Thursday research note shared with Cointelegraph.
Analysts said the computing power of third-party Bitcoin miners will remain highly valuable as access to power remains a real bottleneck in the artificial intelligence industry amid growing political opposition to the construction of fresh data centers in the US.
Bitcoin mining stocks posted double-digit gains on Monday after Bitcoin mining companies Hut 8 and IREN announced immense AI infrastructure deals. Hut 8 announced a 15-year lease for its AI data center campus for $9.8 billion, and IREN revealed $2.8 billion in cloud services contracts with AI developers.
“IREN is starting to turn this infrastructure advantage into contracted and more predictable revenues,” he said Curious Analyst Seeks Alpha Associate on Thursday. “The biggest risk to my thesis is execution,” they said.
There are tons of tie-ins with AI miners in July
Other publicly traded Bitcoin mining companies have also expanded into artificial intelligence. In early July, MARA Holdings announced plans to acquire a Texas facility with up to 2 gigawatts of capacity to expand its artificial intelligence and digital infrastructure businesses.
A few days earlier, TeraWulf signed a 20-year data center lease with artificial intelligence startup Anthropic. A deal that the company said could generate approximately $19 billion in contract revenue.
Bitcoin mining infrastructure company Bitdeer has also expanded into AI cloud services and high-performance computing.
Based on activity before the opening of the session, most mining companies were poised for gains on Thursday. HUT 8 shares increased by 5.23%, IREN by 1.89% and TeraWulf by 1.49%. The CoinShares Bitcoin Mining ETF (WGMI) rose 1.47% ahead of the Nasdaq open. Bernstein has an outperform rating on every stock he mentions except MARA, which he rates based on market performance.
Related: Foundry asks Bitcoin miners to vote to support BIP-110
AI data centers face political resistance
Bernstein’s research note said Bitcoin miners and third-party computing power providers will remain crucial to artificial intelligence companies as the construction of fresh data centers faces growing bipartisan political opposition.
On Wednesday, Democratic candidate for Texas Senate James Talarico apparently shared a proposal to create stronger local approval processes and repeal tax breaks for AI data centers.
In April, U.S. Senator Ron Wyden common fears AI data centers in his home state of Oregon could worsen water scarcity during continuing droughts. He said immense data centers can utilize up to 5 million gallons of water per day and asked immense data center operators to explain how they would reduce groundwater withdrawals to protect local water sources.
In March, President Donald Trump’s administration published a ratepayer protection commitment aimed at expanding AI infrastructure without increasing electricity bills for households and petite businesses.
In January, several state governors released their publications plans expand the network to meet rapidly growing demand from AI data centers, but said fresh data centers should bear the costs they generate rather than passing them on to existing residential customers and petite businesses.
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