Why Jefferies Recommends Riot Platforms Inc (RIOT) Stock

Riot Platforms Inc (NASDAQ:RIOT) is one of the best data center stocks to invest in according to billionaires. In the past month, Riot Platforms’ shares have gained more than 20%. That puts the stock’s year-to-date gains at around 77% and past-year gains at roughly 180%.

Why Jefferies Recommends Riot Platforms Inc (RIOT) Stock

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On May 14, Jefferies initiated coverage of Riot Platforms Inc (NASDAQ:RIOT) stock with a Buy rating and a $37 price target. The target indicates a roughly 47% upside to the current price. Jefferies based its call on the company’s growing digital infrastructure operation and vertically integrated business model.

According to the firm, Riot has a large digital infrastructure footprint in metro-adjacent markets in Texas. These include Corsicana and Rockdale campuses. The firm pointed out that AI inference workloads favor the kind of network adjacency that Riot campuses offer. Riot has already secured a lease deal with AMD at the Rockdale site.

In addition to Riot’s strategically located campuses, Jefferies also hailed the company’s ability to design and manufacture certain data center components in-house. According to the firm, producing switchgear and power distribution equipment in-house gives Riot a supply chain advantage and strengthens its position in lease negotiations.

Jefferies explained that its investment thesis on Riot stock hinges on the company securing anchor tenants at its Corsicana and Rockdale sites. Moreover, the thesis hinges on Riot converting its power assets and engineering expertise into AI large-scale AI deployments.

Riot Platforms Inc (NASDAQ:RIOT) is a crypto-mining and digital infrastructure company. Its crypto division primarily mines Bitcoin. The infrastructure unit builds and operates data centers to power AI and other high-performance computing workloads.

While we acknowledge the risk and potential of RIOT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RIOT and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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