Riot Platform ( RIOT ) shares jumped about 8% on Friday after Advanced Micro Devices ( AMD ) expanded its capacity at the company’s Rockdale, Texas campus, highlighting Riot’s continued pivot from bitcoin mining to AI and high-performance computing.
According to Q1 financial results, AMD exercised an option to double its contracted capacity to 50 megawatts (MW), with the potential to upgrade to 150 MW. According to the earnings statement, Riot said the deal could generate about $636 million over a 10-year period.
Riot also secured improved terms on its $200 million bitcoin-backed credit facility with Coinbase, cutting the rate to a fixed 6.15% from 8.3% and releasing 1,544 of the pledged collateral bitcoin, signaling growing lender confidence in its expanding data center business.
Along with the AMD deal and improved credit terms, investors are paying a premium for the stock. “Market pricing in lower cost of capital as expanded AMD deal boosts lender confidence,” said Matthew Sigel, head of digital assets research at VanEck.
Riot was one of the last few ‘pure play’ mining companies left that didn’t get into hosting AI computers, while others opened their data centers to move away from mining. Until recently, activist investor Starboard began urging management to accelerate its transition from bitcoin mining to an AI infrastructure provider.
The move to expand its data center business to host AI computing appears to be paying off for the Castle Rock, Colorado-based company.
The firm reported total revenue of $167.2 million for the quarter ended March 31, up from $161.4 million a year earlier, supported by $33.2 million in initial data center revenue. However, bitcoin mining revenue fell to $111.9 million from $142.9 million, primarily due to lower bitcoin prices and increased mining competition. The mining company’s shares are up about 147% over the past 12 months, while bitcoin is down nearly 17%.
The company, which previously held onto all of its mined bitcoin, is also accelerating its bitcoin sales. According to Bitcoin Treasuries data, the company sold 3,688 BTC during Q1. The company ended March with 15,679 BTC and $282.5 million in cash.
Read more: Treasury boom in bitcoin is winding down as some companies and governments sell holdings
