Shares of Riot Platforms (RIOT) experienced an 8% increase on Friday following the announcement that Advanced Micro Devices (AMD) would be expanding its presence at Riot's Rockdale, Texas facility, symbolizing the company's ongoing transition from bitcoin mining to artificial intelligence and high-performance computing. According to the company's Q1 financial report, AMD opted to double its contracted capacity to 50 megawatts, with potential expansion to 150 megawatts. The agreement is anticipated to generate approximately $636 million over a decade.
Furthermore, Riot renegotiated the terms of its $200 million bitcoin-backed credit facility with Coinbase, securing a reduced interest rate of 6.15% from 8.3% and releasing 1,544 pledged bitcoin as collateral, indicating 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, with market analysts noting that the expanded AMD partnership is driving lender confidence and lowering the cost of capital.
Riot's strategic shift towards AI infrastructure provision appears to be yielding positive results, with the company reporting total revenue of $167.2 million for the quarter ending March 31, supported by initial data center revenue of $33.2 million. Although bitcoin mining revenue decreased to $111.9 million due to lower bitcoin prices and increased competition, the company's shares have surged approximately 147% over the past year, outperforming bitcoin's 17% decline. Riot is also accelerating its bitcoin sales, having sold 3,688 BTC during Q1, and now holds 15,679 BTC and $282.5 million in cash.