Analysts at research firm Bernstein have raised their price target for Riot Platforms, an AI infrastructure provider formerly known as a bitcoin miner, to $35 from $30 while maintaining an Outperform rating. The raise is based on the company’s recent $9.1 billion data center agreement with a leading frontier artificial intelligence lab called Anthropic.
The 20-year colocation lease covers 191 IT megawatts at Riot’s Rockdale campus in Texas and is expected to generate $457 million in annual recurring revenue, according to Bernstein. The firm estimates the average annual net operating income for the AI colocation business will be between $365 million and $411 million, with capital expenditure of $2.1 billion to $2.3 billion.
These latest announcements provided a “clear scale up path” for monetizing Riot’s Texas infrastructure, including a non-binding letter of intent for its 1 GW Corsicana site. Under Bernstein’s sum-of-the-parts model, AI colocation contributes about $12.3 billion, or 84%, of Riot’s enterprise value ($14.7 billion), with Bitcoin mining accounting for approximately $1.7 billion and the holding of bitcoins contributing $740 million each.
Gautam Chhugani, an analyst at Bernstein who led the note to clients, commented that the deal’s economics prompted them to raise their modeled annual revenue yield for Riot’s AI colocation business to $2.2 million per IT MW from $1.5 million previously, while increasing its estimated EBITDA margin to 84% from 80%. The firm models 391 IT MW of total contracted capacity by 2030.
Written by Roger Slater
Technology Desk
