US-based mining and technology company Riot Platforms attracted attention with an increase of approximately 8% per share on Friday. This rise was driven by the company’s expansion of Advanced Micro Devices’ (AMD) capacity at its campus in Rockdale, Texas. Riot, which has been focusing mainly on Bitcoin mining for a long time, has recently shifted to the field of artificial intelligence and high-performance computing.
AMD collaboration and new revenue potential
In the 2024 first quarter financial results announced by the company, it was stated that AMD doubled its contracted capacity within the scope of the agreement and increased it to 50 megawatts. It was stated that this capacity could be increased up to 150 megawatts in the future. According to the financial report, this agreement between Riot and AMD is expected to generate a total of $636 million in revenue over ten years. This data shows that the company is also growing rapidly in non-Bitcoin business lines.
Improvement in credit conditions and investor interest
Riot also updated its $200 million Bitcoin-secured loan agreement with Coinbase. The loan interest rate was reduced from 8.3% to a fixed 6.15% and 1,544 Bitcoins held as collateral were released. Investors state that confidence in the company is increasing as the data center business grows.
Matthew Sigel said, “Riot shares are trading at a premium in the market, thanks to the growing agreement with AMD reducing financing costs; this increases the confidence of investors and lenders.”
Growing artificial intelligence-driven transformation
Riot Platforms stands out as one of the rare companies that transitioned from Bitcoin mining to high-performance artificial intelligence infrastructure. Recently, investors such as Starboard have begun to put pressure on the company management, which has insisted on pure mining activities for a long time, for faster transformation. As a result, Riot’s moves to expand data center capacity have been well received.
Operating in Castle Rock, Colorado, Riot’s data center revenues amounted to 33.2 million dollars in the first quarter of the year. Total revenue increased compared to the same period last year, with $167.2 million. Income from Bitcoin mining decreased to 111.9 million dollars; The decrease in Bitcoin prices and the increase in competition in mining were effective in this decline.
While the company’s share performance attracted attention with a 147% increase in the last year, there was a 17% decrease in the Bitcoin price in the same period. It was also a significant departure from its strategy of operating in Bitcoin mining and holding only the assets it produced.
According to Bitcoin Treasuries data, Riot sold 3,688 BTC in the first quarter of 2024. At the end of March, the company had 15,679 BTC and $282.5 million in cash.
