Bitcoin Miners’ Stock Rally After Nvidia Posted Strong Q3 Earnings

The global leader of GPU manufacturers, NVIDIA, just unveiled their Q3 earnings. Following this news release, famed mining companies like IREN and Cipher Mining have been witnessing an increase in their stock following.

With companies like IREN and Cipher Mining shifting their focus from cryptocurrency mining to AI and Data Center operations, the demand for high-performance GPUs has gone up. We will look at how these developments are going to impact the market through this article.

Stocks Rise Nearly 10% In Just Hours.

Following the good news from NVIDIA, IREN’s stocks skyrocketed to a whopping $50.45 after the price had hit a daily low of $45.83 after the drawdown. This is almost 10% of growth in just a matter of hours.

How did NVIDIA’s announcement cause such a price rally? Historically, companies like IREN have been fully focused on cryptocurrency mining. Their shift to a new business model that comprises AI and Data Centers has invited much appreciation from investors.

Earlier this year, IREN secured a 9.7 billion US dollar worth, multi-year contract with Microsoft to provide AI and Data Center services. This deal involves IREN supplying its huge NVIDIA-based GPU power source from North America to Microsoft for training and developing AI models.

This deal had established IREN as the single largest seller to Microsoft. IREN sources NVIDIA GPUs from Dell Technologies. The single large purchase from Microsoft alone is an indicator that the sector in which companies like IREN and Ciper Mining operate is booming.

This could be the prime reason behind the rise in stock value after NVIDIA announced its successful quarter. With associated businesses booming, the market is soon going to witness a rally for those tech companies that are adding value in the AI domain.

Evidence of this trend mounts as we see IREN’s stock value rise by ten times this year and a 366.7% year-to-date growth. Similarly, Cipher Mining has also seen double-digit rallies in a single day. The CIFR stock rallied to a high of $16.51, increasing nearly 12% in a day.

NVIDIA’s Q3 report validates this trend as its customers are witnessing epic growth over the year. With a 57 billion US dollar net revenue in Q3, NVIDIA has improved from its Q2 figures by 22%. This has also marked NVIDIA’s year-to-year growth to be nearly 62%.

So without doubt, the data center and AI model of business is creating value in the industry. A large part of this can be attributed to the increase in the user base of AI applications and tools. Every nook and corner of the internet is now occupied with content that is related to AI in some manner. With such a growing demand for AI systems, a clear picture is being drawn for this business segment.

Future Projection of AI and Data Center Business Model

NVIDIA is making strong projections for its Q4 round with an expected revenue of 65 billion US dollars, with a non-GAAP gross margin of 75%. According to CEO Jensen Huang, such a rise in revenue is courtesy of the demand for NVIDIA’s Blackwell chips and Cloud GPUs. The demand has risen over the past few years as companies like IREN and Cipher Mining are migrating to a new business model of AI and Data Center provision.

Amidst the growing demand in this sector, IREN has secured 2910 MW of power capacity to fuel its upcoming journey. Industry experts view this as IREN’s expansion since IREN had recently reported a revenue of 501 million US dollars from its AI cloud business.

Bitcoin halving in 2024 has also greatly contributed to this shift. Since the last halving, the reward had become 3.125BTC per block. Based on the network difficulty and the power costs, mining is fast approaching a non-profitable region. This is one of the major reasons why giants like IREN and Cipher Mining are transitioning towards AI and cloud-based computational service provision.

Conclusion

The surge in IREN and CIFR’s stock indicates a potential transition of mining companies. As companies like IREN and Cipher Mining pivot from traditional Bitcoin mining toward AI and data center services, investor confidence continues to rise. NVIDIA’s record-breaking revenue and the massive demand for advanced GPUs further validate this shift. In the end, the convergence of AI, cloud computing, and high-performance hardware signals a new chapter that is awaiting companies like IREN and Cipher Mining.

With a loaded base of high-tech chips and cooling systems, going to be impractical for mining; this shift came late. Hopefully, the decision to transition from mining to AI and Data Center models may bring a new era of developments and innovations in the high-power computing domain.

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