Shares of Riot Platforms (RIOT) experienced an 8% increase on Friday following the announcement that Advanced Micro Devices (AMD) would be expanding its capacity at Riot's Rockdale, Texas campus. This development highlights Riot's ongoing transition from bitcoin mining to 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 expected to generate approximately $636 million over a 10-year term, as stated in the earnings transcript.

Furthermore, Riot has secured more favorable 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 bitcoins. This move signals growing lender confidence in the company'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. As Matthew Sigel, head of digital assets research at VanEck, noted, 'Market pricing in lower cost of capital as the expanded AMD deal drives lender confidence.' Riot was one of the last remaining 'pure play' mining companies that had not yet ventured into hosting AI computing.

However, with activist investor Starboard urging the company to accelerate its transition from bitcoin mining to an AI infrastructure provider, Riot's expansion of its data center business to host AI computers appears to be paying off. The company reported total revenue of $167.2 million for the quarter ended March 31, up from $161.4 million a year earlier, supported by $33.2 million in initial data center revenue.

Although bitcoin mining revenue declined to $111.9 million from $142.9 million 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%. Riot, which previously retained all its mined bitcoin, is also accelerating its bitcoin sales.

According to Bitcoin Treasuries data, the company sold 3,688 BTC during Q1 and ended March with 15,679 BTC and $282.5 million in cash.