financemagnates.com
Marathon Digital Holdings, the largest publicly listed Bitcoin (BTC) miner on Wall Street (NASDAQ: MARA), has caught the attention of financial group Macquarie, which initiated coverage of the company's shares with an "Outperform" rating. Due to the company's moves towards the artificial intelligence (AI) industry, the stock is expected to grow by nearly 50% in the coming weeks and months.
MARA Stock Poised to Rise Towards $22, Boosted by AI Boom
On September 24, 2024, Macquarie initiated coverage of Marathon Digital Holdings with an "Outperform" recommendation. This positive outlook for MARA's stock has garnered attention in the financial markets.
A $22 price target would be MARA's highest since late July and would represent a significant rebound from current lows. The company can't consider the current year successful: while Bitcoin continues to gain 50%, its stock has fallen by 35%.
However, this is expected to change due to the company's moves towards AI, a trend followed by an increasing number of firms in the mining sector. They focus on high-performance computing (HPC), as confirmed by a recent analysis from investment management firm VanEck.
VanEck's head of digital assets research, Matthew Sigel, estimates that this strategic pivot could unlock $38 billion in value for mining companies by 2027.
"AI companies need energy, and bitcoin miners have it," commented Sigel. "As the market values the growing AI/HPC data center market, access to power—especially in the near term—is commanding a premium."
Although MARA hasn't officially announced plans to shift its focus to AI, recent personnel moves seem to confirm this direction. In early September, the company appointed George and Barbara Humpton to its Board of Directors and named Doug Mellinger as Lead Independent Director. George, for example, possesses "deep expertise in artificial intelligence, data centers, and high-growth technology environments."
“Janet's extensive experience in artificial intelligence and data center operations, coupled with Barbara's leadership in technology and infrastructure, will be invaluable as we continue to innovate and grow,” commented Fred Thiel, the MARA CEO.
Macquarie's bullish stance on Marathon Digital is also based on several additional factors:
- Market Position: Marathon Digital was recognized for its commanding deployed capacity among institutional Bitcoin miners.
- Comprehensive Offerings: The company's broad range of services in the digital infrastructure space, including MARAPOOL, MARAFW, Auradine, 2PIC, and various sustainability initiatives, were highlighted as key strengths.
- Integrated Platform: Macquarie views Marathon Digital as a scaled, integrated platform for investors looking to engage with the bitcoin sector.
Mara Stock News: Marathon Digital Reports 5% Increase in Bitcoin Production for September
According to the newest MARA’s mining report, the company produced 705 bitcoins in September, marking a 5% increase from the previous month.
The Wall Street Bitcoin miner’s energized hash rate grew to 36.9 EH/s, up 5% from August's 35.2 EH/s. Marathon won 207 blocks during the month, a 6% rise compared to August.
"Our globally diversified operations demonstrated strength in September, with significant uptime and increased hash rate," said Fred Thiel, Marathon's Chairman and CEO. "We're proud to have surpassed a marathon worth of bitcoin holdings, with nearly 27,000 BTC on our balance sheet."
The better results come in a time, when Bitcoin mining difficulty hit a record high of 92.67 trillion, slashing profit margins among producers.
However, Marathon remains on track to reach its target of 50 EH/s by the end of 2024. The company is making progress on converting its Granbury data center from air-cooled to immersion containers, with completion expected before year-end.
As of September 30, Marathon held 26,842 unrestricted Bitcoins and did not sell any during the month. Key operational metrics for September include:
- Average daily BTC production: 23.5 (up from 21.7 in August)
- Share of available miner rewards: 5.2% (up from 4.8% in August)
- Transaction fees as percentage of total: 1.7% (down from 2.7% in August)
Last month, MARA announced the purchase of $249 million worth of Bitcoin, after successfully closing a convertible senior notes offering in two days.