Compass Point Says AI Contracts, Not Bitcoin, Now Drive Miner Valuations

Several former bitcoin miners now converting sites into AI data centers may be worth more than their share prices suggest, according to a report from Compass Point, which says some are worth more than their share prices suggest. Analysts Michael Donovan and Ed Engel argue investors are giving little credit to signed AI leases worth billions of dollars, even as the companies increasingly generate revenue that has nothing to do with Bitcoin’s price.

A Framework Built Around Rental Income, Not Mining Economics

Donovan and Engel built a model that separates the value of long-term AI leases already under contract from projects still waiting on tenants. Their argument is that these companies should be valued more like landlords collecting rental income than traditional miners whose earnings track cryptocurrency prices.

To reach that estimate, Compass Point calculates the future rental income from signed contracts, subtracts the remaining cost of building each facility, and compares the result against each company’s enterprise value. The gap between the two figures shows how much, if anything, investors are paying for AI capacity that has yet to be leased.

Applied Digital, TeraWulf and Cipher Show the Widest Gaps

Using that framework, Compass Point said Applied Digital (APLD), TeraWulf (WULF) and Cipher Mining (CIFR) show the largest disconnect between their contracted business and current market value. In each case, the firm argues the market is assigning little value to additional capacity that has yet to be leased, despite the potential for meaningful rental income once those projects are finished.

Several recent deals show the scale involved. TeraWulf signed a 20-year lease with Anthropic in July covering about 401 megawatts at its Justified Data campus in Kentucky, a deal the company said could generate roughly $19 billion in contracted revenue over its initial term, which the company said exceeded its market value at the time. Cipher Mining has built up roughly 700 megawatts of contracted hosting capacity, including anchor leases with Fluidstack, Google and Amazon Web Services, with one site targeting energization in October. 

Applied Digital has signed a 15-year lease with an investment-grade hyperscaler for 200 megawatts at its Polaris Forge 2 site and reported quarterly revenue up 139% year over year.

Core Scientific and Riot Stand Apart for Different Reasons

Compass Point treated two other names differently. Core Scientific (CORZ), the firm said, already has most of its existing contracts reflected in its current valuation, meaning further upside will likely depend on signing new customers rather than the market catching up to old ones. 

Riot Platforms (RIOT) sits at the opposite end, priced more on future potential than current lease income, with investors placing a premium on its Corsicana campus and broader development pipeline despite comparatively limited signed capacity today.

Compass Point Says Execution Will Matter Most Ahead

Compass Point said it expects the next two years to mark a turning point for the sector, as companies shift from unveiling AI partnerships to delivering them. As facilities come online, tenants move in and rent payments begin, the firm expects investors to focus less on future potential and more on the recurring cash flow those projects generate. Companies that execute successfully, Compass Point said, could see valuations move closer in line with other income-producing infrastructure assets.

The shift comes after a volatile stretch for the group. Shares of several former bitcoin miners have climbed sharply over the past year as they announced partnerships with hyperscalers and AI companies seeking large blocks of power and computing capacity, though returns have varied with construction timelines, financing needs and the pace of new customer signings.