Analysts at Bernstein on have rebutted Culper Research’s negative report on Iris Energy Ltd (NASDAQ:IREN), defending the company’s AI and bitcoin mining prospects.

What Happened: On Thursday, IREN fell over 13% following Culper’s report, which claimed IREN shares were overvalued by 52% to 79%, The Block reported. Culper valued Iris Energy’s crypto mining operations between $0 and $100 million.

Iris Energy has responded to the Culper Research report, with a spokesperson telling Benzinga, "As a public company we are limited in how much we can say about reports of a certain nature. We encourage debate and value intellectually honest discourse. However, not all engagement meets these standards."

"We remain focused on our growth to 30 EH/s of mining capacity this year, serving our AI cloud service customers, and pursuing monetization opportunities for our broader power and land portfolio," the spokesperson added.

In a note to clients, Bernstein analysts Gautam Chhugani and Mahika Sapra argued that Culper’s criticism of Iris Energy’s Childress site was misplaced. They emphasized that the site is primarily for bitcoin mining, not AI operations.

Chhugani and Sapra stated, “IREN has not claimed it intends to retrofit its bitcoin mining site in Childress to AI.” They added that 65% of their fair value for Iris Energy is based on bitcoin mining.

Bernstein’s analysts also highlighted Iris Energy’s 1.4GW pipeline site in West Texas as a significant AI opportunity. They countered Culper’s criticism of Iris Energy’s GPU build-out, stating that IREN would build AI data centers with appropriate specifications.

Responding to Culper’s cost comparisons, Bernstein noted that Iris Energy’s current capital expenditure reflects bitcoin mining costs, not AI/HPC costs. They also pointed out the new institutional cycle for bitcoin, driven by Bitcoin ETFs.

On Tuesday, Bernstein initiated coverage on Core Scientific (NASDAQ:CORZ) with an outperform rating. Block (NYSE:SQ), co-founded by former Twitter CEO Jack Dorsey, announced a deal to supply Core Scientific with new ASIC mining chips, potentially worth $300 million.

Read Also: Bitcoin Mining Stocks Marathon Digital, CleanSpark And Riot Platforms Are Rising: What’s Going On?

Why It Matters: Bitcoin miners are becoming attractive partners for AI data center projects due to their available power supplies and operational capabilities. This trend is underscored by significant deals such as Core Scientific's 12-year agreement with CoreWeave and Coatue Management's $150 million investment in Hut 8 (NASDAQ:HUT).

What’s Next: The impact of Bitcoin mining is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next:

• Is A Bitcoin Pump Imminent? This Indicator Says Yes

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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