MARA Holdings’ stock outperformed its competitors on Friday, despite the company missing Wall Street’s expectations in its first-quarter earnings report. Analysts viewed MARA’s strategic approach to cost reduction favorably, seeing it as a positive indicator for future profitability. With Bitcoin prices on the rise in the second quarter, MARA has prioritized the use of renewable energy sources, such as solar power and flared gas-driven data centers, to lower operational costs.
Jefferies analysts noted that MARA’s investments in sustainable energy could significantly reduce power expenses over time. The company is expanding its wind farm infrastructure, currently operating at 114 MW, and has fully energized a new 25 MW micro flared gas data center. These measures are expected to further drive down power costs, improve profitability, and strengthen its position in anticipation of the next Bitcoin halving. Analyst Jonathan Petersen emphasized that continued acquisitions of energy assets would enhance MARA’s margins and reinforce its long-term sustainability. He reaffirmed a hold rating on the stock but increased its price target from $13 to $16.
Bitcoin mining, once an extremely lucrative industry, has faced considerable profitability challenges. The previous bear market eroded margins, and the latest Bitcoin halving—which reduced mining rewards by half—has exacerbated the pressure on revenue streams. Additionally, energy costs have soared, further tightening profit margins for mining firms.
Given these challenges, many Bitcoin miners have sought to diversify their business models. Some companies have pivoted toward artificial intelligence (AI) and high-performance computing (HPC) data centers as alternative revenue streams. However, MARA has taken a different approach, opting instead to expand transaction revenue services, strengthen its mining pool operations, purchase Bitcoin directly on the open market, and reduce power costs by investing in green energy solutions.
MARA’s focus on lowering energy expenses has resonated with investors, as reflected in its stock price surge. H.C. Wainwright analyst Kevin Dede highlighted MARA’s commitment to technological advancements in power conversion, noting that the company is determined to bring energy costs down to zero. He pointed out that MARA is distinguishing itself from its competitors, many of whom are shifting toward HPC and AI-related ventures.
Dede, who has maintained a buy rating on MARA’s stock, raised his price target to $28. He expressed confidence that MARA’s emphasis on optimizing energy consumption and leveraging unused power resources would be instrumental in sustaining long-term growth. He underscored the company’s goal of improving power efficiency while maintaining its core focus on Bitcoin mining.
On Friday, MARA’s stock climbed by 9%, outperforming the broader sector. Meanwhile, the CoinShares Valkyrie Bitcoin Miners ETF (WGMI) recorded a slight decline of approximately 0.3%. MARA’s strategic energy investments and cost-cutting measures appear to be fostering market optimism, positioning the company for stronger financial performance in the coming quarters.
