Shares of Riot Platforms (RIOT) experienced a significant 8% increase on Friday, driven by the announcement that Advanced Micro Devices (AMD) has expanded its capacity at Riot's Rockdale, Texas campus. This development highlights Riot's ongoing pivot from bitcoin mining towards artificial intelligence (AI) and high-performance computing.

According to the company's Q1 financial results, AMD has exercised an option to double its contracted capacity to 50 megawatts (MW), with the potential to increase to 150MW. The agreement is anticipated to generate approximately $636 million over a 10-year period. Furthermore, Riot has secured improved terms on its $200 million bitcoin-backed credit facility with Coinbase, reducing the interest rate to a fixed 6.15% from 8.3% and releasing 1,544 pledged collateral bitcoin.

This move signals growing lender confidence in Riot's expanding data center business. The combination of the AMD deal and improved credit terms has led investors to pay a premium for the stock, with market analysts citing the lower cost of capital as a key factor. 'The market is pricing in a lower cost of capital as the expanded AMD deal drives lender confidence,' stated Matthew Sigel, head of digital assets research at VanEck.

Riot was one of the last remaining 'pure play' mining companies that had not yet transitioned into hosting AI computing, while its peers had begun to open their data centers to move away from mining. However, with the urging of activist investor Starboard, the company has accelerated its transition from bitcoin mining to an AI infrastructure provider.

The expansion of its data center business to host AI computers appears to be yielding positive results for the Castle Rock, Colorado-based company. The firm reported total revenue of $167.2 million for the quarter ending March 31, up from $161.4 million in the previous year, supported by $33.2 million in initial data center revenue.

Although bitcoin mining revenue declined to $111.9 million from $142.9 million, primarily due to lower bitcoin prices and increased mining competition, the company's shares have surged approximately 147% over the last 12 months, while bitcoin has fallen nearly 17%. The company, which previously retained all its mined bitcoin, is also accelerating its bitcoin sales, having sold 3,688 BTC during Q1.

As of March, the company held 15,679 BTC and $282.5 million in cash.