Iris Energy shares slumped 14% after a short seller said the company’s Childress site was unsuitable for hosting artificial intelligence or high-performance computing.

Bernstein notes that the company never said it intended to retrofit the bitcoin mining site to AI.

Iris Energy (IREN) shares fell almost 14% yesterday following the publication of a short-selling report by Culper Research that noted the unsuitability of the bitcoin miner’s Childress, Texas site for artificial intelligence (AI) or high-performance computing (HPC).

The company, however, has committed most of the planned expansion at the site to bitcoin (BTC) mining, broker Bernstein said in a research report, and the existing power and data center infrastructure there work very well for that purpose.

“Iris Energy has not claimed it intends to retrofit its bitcoin mining site in Childress to AI,” analysts led by Gautam Chhugani wrote.

The broker also estimates 65% of the company’s value is derived from bitcoin mining and the remaining 35% from AI/HPC. Bernstein said it completely disagrees with the view that the mining activity is valueless.

Potential AI upside for Iris Energy comes mostly from the 1.4 gigawatt West Texas site that has a power interconnect, the report said, and the opportunity lies in the monetization of the land and the power supply.

The broker said Iris Energy’s current $1 million/megawatt capital expenditure metric is a reflection of bitcoin mining capex. Comparing it to AI/HPC capex is not meaningful.

The company’s valuation is in line with other bitcoin miners such as CleanSpark (CLSK) and Marathon Digital (MARA), whose entire valuation is driven by mining, the report said.

Bernstein initiated coverage of Iris Energy earlier this week with an outperform rating and $26 price target. The shares closed at $11.20 on Thursday.

Read more: Bitcoin Miners Are Attractive Partners to Build Artificial Intelligence Data Centers: Bernstein