Summary Marathon Digital operates 1.1 GW of owned power capacity at $0.04/kWh, positioning it as a low-cost AI infrastructure play. The EDF Exaion acquisition gives MARA access to Tier-4, GDPR-compliant AI data centers and European enterprise clients. IREN re-rated on visible GPU contracts, while MARA awaits AI revenue from Exaion and TAE Power integration. Despite record Q2 results, $238.5M revenue, $1.2B EBITDA, $808M net income, MARA trades at only ~9x EV/EBITDA. Successful AI monetization could double MARA’s valuation, closing its 53% discount to peers trading near 20x EV/EBITDA. Investment Thesis Since my previous coverage , Marathon ( MARA ) is up by 32%, but it only trades at ~9x EV/EBITDA, well below peers. The market only sees it as a pure Bitcoin ( BTC-USD ) miner, failing to recognize the transition into an AI-prepared energy infrastructure firm. With owned capacity of 1.1 GW, $0.04/kWh tied-up energy costs, and partnerships with TAE Power Solutions as well as EDF’s Exaion, MARA is developing variable, low-cost compute capacity that is able to serve AI workloads. Once the said assets come online to have recurring AI revenues, MARA’s multiple is able to re-rate fast, catching up with the likes of IREN ( IREN ) and propelling the next leg of the supercycle. Why MARA’s AI Bull Case Remains Hidden, But May Explode Soon Consensus argues the data-center gold rush has only taken any miner with megawatts and a press release. The stock market has only been rewarding the companies that have already demonstrated an ability to convert power interconnects into contracted, GPU-monetized cash flows, before the next capacity constraint, not those with big Bitcoin treasuries or theoretical “AI optionality.” That’s why MARA's meteoric operating performance hasn't translated into a commensurate multiple while the IREN has re-rated sharply. IREN approved a dual-engine architecture, Bitcoin mining supplemented by an AI cloud business with labeled GPUs, liquid-cooling roadmaps, and fresh multi-year contracts, behind 810 MW of currently operating data-center capacity and 50 EH/s by mid-2025. Its SEC filing also records thousands of H100/H200 operational and Blackwell-class GPUs on order, with short-term commissioning targets. That hardware-plus-contract proof, multiplied by an out-year convert zero-coupon, out-priced amid strong demand, has created a reflexive loop within IREN’s equity. MARA, meanwhile, has produced record profitability and a balance sheet fortress, $238.5 million of Q2 revenue (+64% YoY), $1.2 billion adjusted EBITDA, $808 million net income, 57.4 EH/s, and 49,951 BTC treasury, but the quarter's profit was overshadowed by an unexpected $1.2 billion non-cash mark-to-market gain on digital assets. Equity markets have relegated MARA to the “levered Bitcoin beta” category while they await P&L visibility on AI/HPC dollars, rather than strategy slides. Q2 2025 UPDATE Management is taking the right steps. It raised capital through 0% convertible notes due 2032 , invested in behind-the-meter wind power, and is building partnerships focused on grid management and AI edge computing. Further, MARA agreed to buy a 64% stake in Exaion , an EDF subsidiary, the French energy giant, in August 2025 for $168 million, with the option to take ownership to 75% by 2027. Exaion runs HPC and artificial intelligence cloud data centers under partnership with Nvidia ( NVDA ), Deloitte, and 2CRSI, with business from enterprises and governments. This deal is a transformational step for MARA, it moves the company from pure Bitcoin mining into AI and cloud infrastructure, giving it access to Tier-4, GDPR-compliant data centers and European enterprise clients. In short, it turns MARA’s cheap power and grid flexibility into monetized, AI-ready capacity. However, monetization is still early. If MARA completes the EDF/Exaion deal and turns its flexible energy capacity into real AI or enterprise contracts, its valuation could rise quickly. Until then, the stock remains closely tied to Bitcoin prices and mining difficulty. Is MARA’s Formula Really Similar To That Of IREN’s? They appear the same on the surface with low-cost power, humongous data centers, and AI optionality. Their business approaches, however, are very different. IREN is GPU-centric. It’s already deploying thousands of Nvidia chips and has sealed multi-year AI cloud deals. With liquid-coupled expansion and ERCOT interconnects on the horizon, investors take IREN as a miner cashing in from the AI already. That’s why the recently raised 0% convertible was so well tolerated, the market believes in its AI business but not speculatively. MARA is grid-focused. It’s deploying mining revenues to construct versatile, inexpensive power infrastructure capable of powering AI data centers. Running 1.1 GW of operational capacity at only $0.04/kWh, MARA is making its power headway into a future moat. The cooperation with TAE Power Solutions is attempting to make the flexible energy load offered by Bitcoin viable for AI demand, while the upcoming Exaion deal has the potential to provide MARA direct access to European sovereign and enterprise customers focused on AI. Q2 2025 UPDATE In short, both companies raised 0% converts, but MARA’s capability to generate yield from its Bitcoin stack allows it to finance growth without fresh dilution. Thus, so long as investors continue to pursue visible GPU revenue, IREN remains the simpler story. But if the market pivots toward energy versatility and sovereign AI infrastructure, MARA’s thesis is poised to re-rate quickly. Why MARA Still Trades Below Its True Power Value At approximately $20 per share, MARA is valued at about 11.6x trailing earnings, 63% off the industry median of 31.2x, and 9.0x EV/EBITDA compared to 19.4x for the group. Cheap by these trailing figures, much backed by all-time-high profitability and benign energy prices. However, forward estimates paint a murkier picture. Analysts expect $0.48 EPS for FY2025, implying a forward P/E near 42x , and revenue of just under $1 billion, translating to a forward P/S of around 7x, about 2x higher than the sector average. This valuation discrepancy is driven by skepticism over the sustainability of current earnings on an eventual normalizing of non-cash Bitcoin revaluations and shutting post-halving mining margins. The Street obviously doesn't count on one-time marks-to-market benefits that fueled the Q2 $808 million net income . Nevertheless, on an EV/EBITDA basis, however, MARA continues to screen nicely, pricing below half the peer multiple, hinting the underlying business still appears undervalued compared with the sector’s growth names such as IREN or CleanSpark ( CLSK ). Data by YCharts Between the Halving and the Hype: MARA’s Tightrope Risk MARA's greatest risk remains that of economic dependence on Bitcoin. Revenues still directly result from the mining of over 90% of the Bitcoin supply, so the profits are extremely dependent on the price of Bitcoin and the difficulty level of the network. Any sustained decline in the BTC or increase in the global hash rate will quickly constrict margins despite the MARA's low $0.04/kWh power cost . The mining reward decrease coming up in April 2024 has already cut block rewards by half, so the future viability is dependent on the growth of the fee from transactions or other efficiency gain. MARA's 10Q Another critical risk is execution on its transition to AI and HPC. The TAE Power Solutions joint venture and planned acquisition of Exaion are strategic but have not yet generated visible revenue. If integration is stalled or if the market for AI compute is anemic, the market may continue to only value MARA as a Bitcoin miner, capturing multiple expansion. Takeaway Marathon’s narrative is no longer solely bitcoin’s. MARA is still only ~9x EV/EBITDA, well behind peers, as the market only sees miners. However, its 1.1 GW inexpensive power, Exaion agreement, and AI partnerships put it in an ideal place to transition into enterprise-caliber compute, realizing an impressive re-rating in the next 12 months.
