Riot Platforms Stock Rating Upgraded by J.P. Morgan Amid Expansion and Growth

J.P. Morgan, a notable financial institution, has changed its rating of Riot Platforms (NASDAQ: RIOT), a prominent player in the cryptocurrency mining industry, uplifting it from 'Neutral' to 'Overweight'. This significant shift mirrors the firm's optimism in Riot's rapid growth projections.

Expansion of Mining Capacity

Riot Platforms, which is closely linked with the performance of Bitcoin (BTC-USD), is on a path to considerably enhance its mining operations. The company is gearing up to more than double its current mining capacity, with projections to activate 9 exahashes per second (EH/s) within the next few months. This will be followed by an additional 10 EH/s increase in the latter half of 2024, potentially spiking Riot's total hashrate to an impressive 31.5 EH/s by the end of that year.

Current Performance and Growth Path

As of February, Riot has achieved a deployed hashrate of 12.4 EH/s. Analyst Reginald Smith highlights Riot's advantage, noting that it possesses a clearer trajectory towards growth in comparison to other publicly listed miners. These competitors often need to procure smaller sites or undertake new constructions to reach similar near-term hashrate goals.

Despite the upbeat scenario, there's a note of underperformance in RIOT's share price, which has dipped by 32% on a month-by-month basis, even against the backdrop of Bitcoin's 21% price surge. Smith hypothesizes that the underperformance could be due to a mixture of factors like stagnant hashrate growth, potential equity dilution, and general profit-taking across the industry.

Contradicting the SA Quant system's 'Hold' rating on RIOT, Smith's 'Overweight' endorsement is more in line with the 'Strong Buy' consensus from Wall Street analysts.

Given the new rating and the anticipated growth, RIOT shares witnessed a 4.1% increase in premarket trading, signaling investor confidence following J.P. Morgan's optimistic outlook.

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