Riot Platforms Looks Good Heading Into Year-End

Summary Upgrading RIOT to a Buy due to a strong crypto market outlook, relatively fixed mining costs, low valuation, and a compelling technical setup. Riot Platforms’ business model is incredibly scalable when Bitcoin prices stay and rise beyond profitability thresholds. Valuation remains attractive at 1.4x P/B, well below historical averages, with potential upside over 100% if sentiment improves. This is a speculative, high-risk play with significant downside if Bitcoin crashes, not a long-term hold—take profits on strength. Introduction Riot Platforms ( RIOT ) has gained a lot of traction in recent weeks. On May 5, I published an article on RIOT with a Hold rating. If I helped motivate existing shareholders to hold, great, but in retrospective, the best course of action would have been to iterate a Buy, as the stock has outperformed the S&P 500 by 4X since that article went live. Seeking Alpha This comes as Bitcoin has seen impressive relative strength the last few months as well, after recovering quickly from its April lows. It is currently just 3.5% off its ATH and looks like it wants to reach a few new ones this year. TradingView Revenue growth has seen improvements for three consecutive quarters in a row, but so have expenses. Simultaneously, RIOT is scaling their energized hashrate (E/H), aiming for 38 E/H at the end of 2025. Combining efficiency gains with Bitcoin prices at or above profitability thresholds makes Riot Platforms’ business very scalable, at least for this year, as cycle theory suggests a rough 2026 . For RIOT to be profitable, I estimate that average Bitcoin prices need to remain above $100k, which is a safety margin added on top of their Q1 2025 $81k average cost to mine one Bitcoin, including miner depreciation. Further appreciation of Bitcoin will flow to RIOT’s bottom line, be it from net proceeds from Bitcoin mining or unrealized gains from their treasury strategy, which is why they are so compelling for investors expecting the crypto market rally to continue. Macrotrends Their Bitcoin HODL stack is growing while they continue to sell most (but not all) of their produced Bitcoins. In an update on June production , of the 450 produced BTC, 48 went into their stack, which reached 19,273 BTC. At $108k, this adds up to a value of $2.1B and already makes up roughly 50% of their market cap. My goal with this article is to touch on my previous analysis and analyze RIOT fundamentally as well as technically. After having done so, I am upgrading Riot Platform to a Buy, due to strong cryptocurrency market outlooks for this year, costs to mine remaining fixed, a low valuation, and a strong technical setup. Valuation RIOT is a hardware-heavy business due to all the servers they need to facilitate their bitcoin mining. Combining this with the fact that RIOT’s phases of profitability occur very seldom and revenues are highly cyclical, I believe the P/B ratio is best for a multiples valuation. They’re currently trading at a level of 1.4X, which is significantly lower than their 5-year average of 2.9X. Mining risk could be priced in as a P/B ratio close to one, which suggests the market distrusts the business’ capability of generating earnings. If the assets of a business can be sold (in total) for what the company is worth, there can’t be high (or any) expectations of net income production, as that would result in a large earnings yield and make the company undervalued. Data by YCharts They are leaning more into AI/HPC , though, which supports more predictable revenue and no surge in expenses every four years like the Bitcoin halving causes. This might in fact not be fully priced in. I therefore believe that amid a continued crypto rally that lightens up investor sentiment for miners like Riot Platforms, their P/B could reach the set average again, which offers upside potential north of 100%. Technical Analysis The technical analysis I shared in my last article (depicted below) was decently accurate, as I saw short-term upside potential to around $14. In actuality, the price recently ended up at $12.7, supported by a lot of momentum. TradingView (Previous Analysis) Since then, I slightly adjusted the descending resistance so it has more points of connection. The momentum of the recent rise can be seen in the weekly RSI reaching highs of 63. Levels like this usually lead to short-term corrections, so nothing to worry about here. In addition to the RSI, price was also rejected from this newly adjusted trendline. Price action of recent weeks has built an uptrend that is clearly confirmed by higher highs and higher lows. A slight pullback now is healthy and does not negate the set uptrend if it does not form a lower low. Currently, it is far from doing so. TradingView Zooming in to the daily chart, the uptrend becomes more apparent, as RIOT currently trades above the 50-200 EMAs. A new support line has been formed from the lows, which can help both maintain the structure and lead to increased appreciation as well as guide us on where price could go in 2025. Following this trend, I estimate RIOT could reach $16 per share, which implies and upside potential of 39%. This poses as my minimum price target. TradingView Needless to say, this is not a play on technical undervaluation but rather one on trend continuation, as price is more overbought than before but the current uptrend remains intact. Risks With this name, associated risks are elevated, especially when I am recommending a Buy after a strong performance following my previous Hold rating. Valuation metrics have obviously gone up but are still on the cheaper end. The biggest risk remains Bitcoin volatility. I expect Bitcoin to experience a significant drop (60%+) in 2026 following cycle theory, but it remains just a theory after all. Such a crash could happen anytime, including this year. That would wipe out my whole investment thesis, as RIOT would have to go back to reporting huge losses and dilute shareholders more heavily. Losses on their Bitfarms investments might also offset this year’s profitability, as they’re currently sitting on about $130M in unrealized losses. Conclusion At current prices, RIOT is a speculative Buy. Revenue growth seems solid; they are increasing efficiency; mining costs should stay somewhat flat – all while Bitcoin is set to reach new ATHs this year, skyrocketing their mining revenues and HODL stack’s unrealized gains. At a low valuation and supported by a technical uptrend, this can lead to explosive returns in the coming months. I do feel the need to highlight that this is only for investors with a large appetite for risk. I also want to reiterate that this rating by no means constitutes a buy-and-hold recommendation, as I am convinced RIOT is not a good long-term investment. Take some profits on the way up.

Source: Seeking Alpha