AI infrastructure contracts could unlock hidden value in former bitcoin miners, analysts say
Compass Point analysts Michael Donovan and Ed Engel believe some companies shifting from bitcoin mining to AI data center operations may be undervalued because investors are overlooking the potential worth of their already signed AI hosting agreements.
The analysts introduced a valuation approach that distinguishes between revenue from secured long-term AI contracts and future projects that still need customers. They argue that these businesses should increasingly be evaluated as infrastructure providers earning recurring rental income rather than traditional crypto miners whose performance is heavily influenced by bitcoin prices.
To assess the opportunity, Compass Point estimated the future rental value of contracted AI data center agreements after factoring in the remaining construction costs required to complete the facilities. The firm then compared those estimates against each company’s enterprise value to determine how much investors are paying for upcoming development opportunities.
Based on this analysis, Applied Digital (APLD), TeraWulf (WULF), and Cipher Mining (CIFR) showed the widest gap between their contracted AI business and current market valuations. Compass Point said investors appear to be assigning minimal value to future AI capacity that has not yet secured tenants, despite the possibility that these projects could create substantial long-term revenue streams.
The analysts highlighted Core Scientific (CORZ) and Riot Platforms (RIOT) for different reasons. Core Scientific’s existing AI agreements are already largely reflected in its valuation, meaning additional upside may depend on winning new customers. Riot, meanwhile, is being valued primarily on its future growth potential, with investors placing greater emphasis on its Corsicana campus and planned AI expansion despite limited contracted capacity at present.
The report suggests the coming two years could be a defining period for the sector as companies transition from announcing AI infrastructure deals to actually completing projects and generating revenue. Once facilities are operational and tenants begin paying for capacity, investors will gain a clearer view of the recurring cash flows these businesses can produce.
Former bitcoin mining companies have become one of the strongest-performing areas within the AI investment theme. Several miners have seen significant share price gains after securing partnerships with hyperscalers and AI companies seeking access to large amounts of electricity and computing power. However, market performance has varied as investors assess construction schedules, financing challenges, and the pace of new contract announcements.
The broader transformation highlights how mining firms are repurposing existing infrastructure, including power availability and electrical systems, to support AI and high-performance computing workloads. Unlike bitcoin mining, where revenue changes with cryptocurrency market cycles, AI data center leases can provide more stable and predictable income.
Following recent weakness in the sector, Compass Point believes the market is entering a stage where execution will matter more than future expectations. As companies complete facilities and turn signed agreements into actual revenue, investors may begin focusing less on potential growth and more on measurable cash flow generation.
