Mara Holdings: A Bitcoin Mining Company with a Secret AI Business

Marathon Digital's AI Infrastructure Potential

Marathon Digital (MARA) operates 1.1 GW of low-cost power capacity ($0.04/kWh) and is strategically evolving into an AI infrastructure provider. The acquisition of Exaion, an EDF subsidiary, provides access to Tier-4 data centers, European clients, and Nvidia partnerships. This moves MARA beyond pure Bitcoin mining toward AI and cloud infrastructure opportunities.

Valuation Discrepancy and Investment Opportunity

Despite record Q2 results, including $238.5 million revenue and $808 million net income, MARA trades at a discount (~9x EV/EBITDA) compared to peers. Market perception limits MARA to a "levered Bitcoin beta," overlooking the potential for AI revenue generation. Successful monetization of AI infrastructure could significantly boost MARA's valuation.

Strategy and Key Risks

MARA's strategy focuses on developing versatile, low-cost power infrastructure supported by partnerships with TAE Power Solutions and the Exaion acquisition. A significant risk remains dependent on Bitcoin prices and mining difficulty, with margins impacted by price declines or increased network difficulty. Ultimately, visible AI revenue generation and successful integration are crucial for MARA to achieve a re-rating.

Comparison with IREN

While both companies utilize low-cost power, IREN is GPU-centric with signed AI deals, whereas MARA is grid-focused. Marathon's Bitcoin stack allows for growth financing without dilution, and the market's shift towards energy versatility and sovereign AI infrastructure could trigger a quick re-rating of the company.