MARA Holdings' Bitcoin Haul Falls Short as AI Infrastructure Costs Rise
MARA Holdings, Inc. (MARA) has undergone a significant transformation in its business strategy. The company, which was once focused on Bitcoin mining, has pivoted to pursuing AI data center infrastructure. This shift has led to MARA selling $1.63 billion in Bitcoin and repaying $913 million in debt.
However, the company's decision to switch from mining to AI infrastructure has not come without challenges. Mining costs have increased to the point where they now exceed the price of Bitcoin, with direct cash costs reaching $77,952 per coin. Additionally, much of MARA's remaining Bitcoin has been pledged as collateral.
The company's valuation has heavily priced in the success of its AI infrastructure efforts, with MARA's share price currently sitting at $11.81. This valuation assigns a value of $2.26 million per megawatt (MW) to the company's AI infrastructure, which is seven times its latest acquisition cost.
An analyst has assigned a Sell rating and a $5.35 price target to MARA, citing high execution risk in AI leasing and an insufficient margin of safety given the company's current fundamentals.