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, highlighting the company's ongoing transition from bitcoin mining to artificial intelligence and high-performance computing. According to the company's Q1 financial results, AMD has opted to double its contracted capacity to 50 megawatts, with the potential for further expansion to 150 megawatts. This agreement is expected to generate approximately $636 million over a 10-year term, as noted in the earnings transcript.

Furthermore, Riot has secured more favorable terms for 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, which signals increased lender confidence in the company's growing data center business. The combination of the AMD deal and improved credit terms has led investors to pay a premium for the stock.

'The market is factoring in a lower cost of capital as the expanded AMD deal boosts 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 ventured into hosting AI computing, while its peers had begun to diversify by opening their data centers to other uses. However, with activist investor Starboard urging the management to accelerate its transition from bitcoin mining to an AI infrastructure provider, the company's strategic expansion into AI computing appears to be yielding positive results. The Castle Rock, Colorado-based firm reported total revenue of $167.2 million for the quarter ending March 31, a increase from $161.4 million in the same period last year, supported by $33.2 million in initial data center revenue.

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

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