astronaut
Pearl
Hyperliquid
Walrus
Pudgy Penguins
Bitcoin
NEAR Protocol
RIOT stock jumped by over 25% in the extended hours, reaching a high of $24, its highest level since July 23. It has now jumped by over 37% from its lowest level in July. This is a trend that may continue after it reached a $9 billion deal with Anthropic, the creator of Claude.
Riot Platforms Inks a $9 Billion Deal With Anthropic
Riot Platforms, one of the biggest companies in the Bitcoin mining industry, is pivoting to the AI industry. This transition mirrors that of other similar companies, such as MARA Holdings, Cipher Mining, and IREN.
The pivot is happening due to ongoing weakness in Bitcoin’s price and a jump in mining difficulty over the past few months. At the same time, the cost of Bitcoin mining has jumped because of the halving events and rising energy costs.
Now, Riot Platform’s transition has paid off as demand for computing power jumps. The company has now inked a $9.1 billion deal with Anthropic, a company valued at over $900 billion.
The deal will be for 20 years and will conclude in 2048. Furthermore, it will have two five-year extensions, bringing the total contract value to over $16.1 billion. This deal is based on the Rockdale campus.
The company now hopes that other AI companies will leverage its scale and start using its platform for their data center needs. Some of the potential clients are companies like Microsoft, Meta Platforms, Amazon, Google, Perplexity, Reflection AI, and Oracle.
Riot Platforms’ new statement comes as other Bitcoin mining companies have made such agreements. IREN reached a $9.3 billion deal with Microsoft. In July, it reached a deal with Perplexity AI and companies like Figure AI, Fluidsrack, and Together AI. IREN is now valued at over $13 billion.
CoreWeave, which started as a Bitcoin mining company, has now inked deals worth over $99 billion. It has become one of the biggest companies in the AI data center industry.
A key differentiating factor is that Riot Platforms is mostly focused on AMD chips. At the same time, the others are using Nvidia ones.
Riot Platforms Released Encouraging Earnings
The most recent results showed that Riot Platforms’ revenue rose by 14% in the second quarter to $174.2 million. This revenue increase was driven by a surge in its data center revenue. It jumped to $23.2 million during the quarter.
The jump also happened as the company continued its Bitcoin mining. It mined 1,587 coins, slightly higher than the 1,426 it mined in the same period last year. The company also sold 4,000 Bitcoin earlier this year.
As mentioned above, the cost of mining Bitcoin has been rising in the past few months. In Riot’s case, the average cost to mine BTC rose to $49,912 from $48,992 in the same period last year.
With Bitcoin trading at $64,000, it means that the company is now seeing a $14,000 profit for each Bitcoin mined.
RIOT Stock Price Technical Analysis
The daily timeframe chart shows that the RIOT share price dropped sharply from the year-to-date high of $30.30 to a low of $19.40 on Monday. It then jumped to $23.50 after releasing its financial results and announcing the $9.1 billion deal with Anthropic.
Its lowest level this week coincided with the ascending trendline that links the lowest levels since March 30th this year. It also coincided with the 200-day Exponential Moving Average (EMA).
Therefore, the stock will likely rise to the key resistance level of $25.14, its highest level on June 23rd. However, these gains will likely be short-lived as investors start booking profits.
