Why Mara Holdings Stock Crushed the Market on Monday

The Motley Fool · 1d ago

Key Points

  • This had almost nothing to do with traditional business, however.

  • Investors were getting excited for a different, more powerful reason.

One white-hot segment at the intersection of the tech and cryptocurrency sectors did very well for investors as the trading week kicked off. Crypto miners, which as a group have pushed harder into the lucrative field of data center operations, saw their stocks rise sharply on Monday.

This rally, which helped lift Mara Holdings (NASDAQ: MARA) by more than 9%, was driven by two fresh multi-billion-dollar deals announced by segment players that day.

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Mining a different strategy

The first of those two announcements was trumpeted by Iren, once upon a time a company known almost exclusively as a Bitcoin miner.

Person at a work desk studying something on a PC monitor.

Image source: Getty Images.

Iren revealed, no doubt with immense satisfaction, that it had signed a set of multi-year contracts with top artificial intelligence (AI) developers, under which it'll provide compute capacity to those clients. With that strong tailwind at its back, Iren raised its annual AI cloud run rate revenue guidance from $3.7 billion to over $4 billion.

Not to be outdone, peer and rival Hut 8 announced that it had signed a new lease with a tenant at its Beacon Point data center complex in Texas. This contract, the second lease with the tenant, is worth $9.8 billion and has a 15-year term. Hut 8 did not divulge the identity of its counterparty.

A series of serious lifts

Mara Holdings wasn't directly involved in either of these deals, but it didn't need to be. On the market, a rising tide often lifts all boats. The company is similar in business activity and shares the pivot-into-AI-data-center strategy successfully being implemented by Iren and Hut 8.

While I think the foundational Bitcoin mining business will continue to be up and down for Mara Holdings, it's clear that its data center operations can be quite the powerful motor of growth. I don't blame investors for being very bullish on the prospects of pivoting crypto miners generally, and this company specifically.

Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.