Shares in bitcoin BTC$80,080.03 mining companies that pivoted to artificial intelligence (AI) data center infrastructure look oversold, investment manager VanEck has argued, calling the recent crash a “dislocation”, rather than an outright rejection of the business model.
Prices for these shares dropped by an average 35% in October, as investors treated companies in very different sectors as one monolithic trade, the investment manager said in a note on Wednesday.
VanEck argues bitcoin miners that pivoted to AI data infrastructure such as Hut 8 HUT and Core Scientific CORZ – which it refers to as powered shell providers (PSPs) – suffered from contagion fears spread from GPU rental companies such as CoreWeave (CRWV).
Credit fears spread to PSPs, alongside macro factors such as a hotter-than-expected U.S. consumer price index (CPI) read in September and uncertainty ahead of the November midterm elections.
PSPs provide power to GPU rental companies, which have suffered from higher AI debt yields as they fund costly chips.
VanEck notes that “the power these companies control appears to be the binding constraint on AI compute.”
“At current levels we believe these stocks appear significantly dislocated from fundamentals given their long-term contracted cash flows.”
VanEck emphasizes that the physical bottleneck remains power capacity, not demand. While GPU rental companies, also referred to as neoclouds, faced high debt service costs, crucially, no signed leases were canceled, VanEck said.
Furthermore, backlogs in grid connection timelines effectively place a scarcity premium on the energy capacity that bitcoin miners already provide.
This makes the October market rout a potentially attractive entry point rather than a collapse of the AI-pivot narrative.
