Riot Platforms, Inc. (NASDAQ:RIOT) shares are trading lower on Friday following the release of their second-quarter earnings report. The company reported revenue of $152.99 million, surpassing analyst estimates of $147.65 million. Additionally, Riot reported earnings of 57 cents per share, beating estimates for a loss of 10 cents per share.
JP Morgan analyst Reginald L. Smith reiterated a Neutral rating on the company, stating that Riot’s second-quarter results were in line with expectations. The slight dip in revenue and cash operating profit was attributed to seasonal factors that impacted bitcoin output.
During the earnings call, management discussed their long-term strategy to monetize Riot’s power infrastructure through high-performance computing (HPC) data centers. The company plans to launch a 600 MW site in Corsicana by 2026, with a focus on catering to HPC clients while continuing bitcoin mining operations in the short term.
Smith highlighted Riot’s well-positioned infrastructure for supporting low-latency HPC workloads and noted recent team expansions and site upgrades. However, he cautioned that investors may need to be patient for near-term colocation deals, as Riot was a late adopter of the HPC model.
Management continues to see strong interest in power from hyperscalers, particularly in key markets like Dallas. Riot is actively engaging with potential partners to secure tenants for their planned data center in Corsicana, with upgrades to support HPC needs already underway.
Location is a critical factor for hyperscalers evaluating new data center builds, and Smith believes Riot is poised to meet the requirements for large-scale, low-latency HPC operations. Despite the company’s recent focus on HPC, Smith does not anticipate an immediate colocation announcement due to the lengthy nature of such agreements.
As of the latest check on Friday, RIOT shares are trading lower by 16.5% at $11.21. Investors will be keeping a close eye on Riot’s progress in executing their HPC strategy and securing colocation deals in the coming months.
