MARA and RIOT Under Pressure: Energy Costs Surge as AI Pivots Face Investor Skepticism

Market Overview: A Dual Squeeze on Miners

Shares of Marathon Digital (NASDAQ:MARA) and Riot Platforms (NASDAQ:RIOT) faced significant pressure on Friday as investors weighed the impact of soaring energy costs against the unproven potential of their artificial intelligence strategies. MARA stock dropped 6%, falling below $9, while RIOT shares slid 4% toward the $13.50 level.

The selloff reflects growing margin pressure and investor skepticism regarding whether these companies can generate sufficient AI revenue to offset rising operational expenses and Bitcoin volatility.

Marathon Digital: Rising Costs and Strategic Shifts

Marathon Digital is grappling with "cost creep" as global hashrate climbed 66% year-over-year, making mining more expensive. In its most recent quarter, the company reported that its purchased energy cost per Bitcoin rose from $32,433 to $39,235.

Compounding this issue is geopolitical tension in the Middle East, which has driven WTI crude oil prices to $97 per barrel. This surge directly impacts energy-intensive operations like MARA's, as neither company has fully insulated itself from spot energy markets.

Despite these headwinds, MARA is pursuing a diversification strategy:

• International Expansion: The company plans to acquire a 64% stake in Exaion, an EDF subsidiary, aiming to reach 50% international revenue by 2028.
• Data Center Growth: A joint initiative with MPLX is developing West Texas data center campuses starting at 400 megawatts.

However, the company remains highly sensitive to Bitcoin's price movements. Approximately $530 million in earnings impact for MARA Holdings can swing on a single move in Bitcoin's price. Over the past year, shares are down 31%, and over five years, they have lost 80% of their value.

Riot Platforms: Record Revenue vs. Collapsing Profitability

Riot Platforms presents a more complex financial picture. For fiscal year 2025, the company posted record annual revenue of $647.4 million, a gain of more than 70% year-over-year. Yet, this top-line strength masked a dramatic collapse in profitability.

Adjusted EBITDA fell from $463.19 million the prior year to just $12.96 million. The market reacted sharply when the report was filed in early March, sending RIOT shares down nearly 7% at that time.

The AI Pivot and Power Portfolio

Riot's pivot toward high-performance computing is further along than many realize. The company's 10-year data center lease with Advanced Micro Devices (NASDAQ:AMD) became operational in January 2026, generating actual revenue.

Riot Platforms CEO Jason Les framed the strategy directly:

"By unlocking our large, nearly two-gigawatt power portfolio for high-demand data center infrastructure, we are driving significant shareholder value."

This power portfolio is a critical asset. While hyperscalers often wait 36 to 48 months to secure power for new data centers, Riot Platforms already has nearly 2 gigawatts in its portfolio. The challenge lies in execution speed and converting this infrastructure advantage into consistent cash flow before rising mining costs erode the balance sheet further.

Financial Constraints

Riot's financial flexibility is currently limited by its holdings of 3,977 Bitcoin as collateral. Additionally, with the global network hashrate increasing 52% year-over-year as of the most recent quarter, the cost to mine each coin continues to climb regardless of Bitcoin's price.

Market Sentiment and Future Outlook

Prediction markets on Polymarket highlight the uncertainty facing both miners. The probability of Bitcoin reaching a high price threshold by year-end sits at roughly 40.5%, while the probability of a significant dip at some point stands at 70.5%.

Both companies are racing to build AI and data center revenue streams capable of surviving a potential Bitcoin bear market. However, today's price action suggests investors remain unconvinced that either company is moving fast enough to overcome the dual pressures of energy costs and asset volatility.