Bernstein Reportedly Says Bitcoin Miners' AI Deals Look Cheap Vs. Data Center REITs – But Not All Are Equal

Bernstein reportedly said on Wednesday that Core Scientific's (CORZ) eye-catching 75% return on assets from its CoreWeave (CRWV) deal wasn’t a template other Bitcoin (BTC) miners could replicate.Bernstein used a valuation method typically applied to data center landlords to gauge how Bitcoin miners’ AI infrastructure wagers stack up against one another, according to TheBlock.The firm compared returns at Digital Realty and Equinix with those of five miners currently leasing capacity to AI tenants: TeraWulf (WULF), Riot Platforms (RIOT), Cipher (CIFR), CleanSpark (CLSK), and Core Scientific.Why Core Scientific's Deal With CoreWeave Stands OutBernstein said Core Scientific's deal with CoreWeave showed a 75% five-year average return on assets (ROA) and a 79% yield on cost, driven by an unusually capital-expenditure-light structure rather than by favorable contract terms that other miners could replicate.According to the firm, Core Scientific's edge wasn't a better contract than everyone else's — the deal cost the company nearly nothing upfront.The cost to build out the 590 megawatts that Core Scientific is providing to CoreWeave totals $855 million. Bernstein said CoreWeave financed $750 million of that through revenue prepayments, leaving Core Scientific to fund just $105 million from its own balance sheet, or about $1.5 million per megawatt of computing capacity, a fraction of what peers typically spend to build the same thing.Riot is the other exception, Bernstein said, posting a 23% five-year average ROA and a 29% yield on cost, driven by an incremental $3.5 million per megawatt to retrofit its existing Bitcoin facilities — putting it on par with Equinix."We believe such capex-advantaged deals are limited and do not reflect the overall economics of emerging AI infra players," the analysts said.TerraWulf And Cipher ReturnsThe stabilized returns of 5% and 4% on assets at TeraWulf and Cipher were a better guide to what miners-turned-AI-landlords should typically expect, Bernstein said, rather than the outlier numbers at Core Scientific. CleanSpark is trading nearly in line with Cipher.The two companies do have some cost differences, though, said the firm. TeraWulf spends about $8-10 million to build out each megawatt of computing capacity, compared to Cipher’s $9-11 million. That gap, Bernstein said, largely comes down to how much power infrastructure each company’s sites had in place before they started building.Long-Term Pipeline Supports Bullish Outlook, 20-year Sandersville, Georgia lease, its first AI colocation deal, generates roughly $1.9 million per IT megawatt in annual revenue, trailing the $2.4 million TeraWulf pulls in from its 20-year Anthropic (ANTHZZX) contract under a similar lease structure.Moreover, the investment firm rated the sector ‘Outperform’ across the board, assigning price targets of $36 to TeraWulf, $32 each to Cipher and Core Scientific, $30 to Riot and $24 to CleanSpark, with MARA Holdings the lone Market-Perform at $17. Bernstein noted the 7 GW of power miners have contracted so far represents under a quarter of their combined 30 GW pipeline still to come.A Similar Case From VanEckBernstein's framework echoes an argument  late last month, when he pointed to Blackstone’s (BX) $3.5 billion acquisition of a Digital Realty data center portfolio, priced at roughly $27 million per megawatt, to argue that Cipher and Hut 8 (HUT) trade well below what stabilized AI infrastructure is fetching in the private market.