Key Takeaways
- CleanSpark fell 11% after Gina Hinojosa, who called for a moratorium on new data centers, won the Texas governor’s race, and Keefe Bruyette downgraded it and Cipher Digital.
- The result puts CleanSpark’s Texas campuses in doubt, and they’re the upside beyond the Georgia lease in analysts’ estimates.
- Riot Platforms announced a Texas lease today, and IREN and MARA, with Texas plans too, report within a week.
- Until CleanSpark signs in Texas, the stock rests on one Georgia lease and a mining business that no longer covers its machines.
CleanSpark (CLSK) is down 11% today, and Cipher Digital (CIFR) is off 18%, after Democrat Gina Hinojosa beat Governor Greg Abbott in Tuesday’s Texas election.
“Greg Abbott started the data center madness in Texas,” Hinojosa wrote on X during the campaign, calling on him to “declare a moratorium on new data centers.”
IREN (IREN) fell 9% and MARA Holdings (MARA) fell 2%. The exception is Riot Platforms (RIOT), up 14% on a lease at its own Texas campus.
Two cuts in three days
Keefe Bruyette downgraded CleanSpark and Cipher to Market Perform from Outperform on the result and cut its CleanSpark target to $9.50, after cutting it to $11.50 from $25 on Monday. Bernstein cut its target to $11 from $24 but kept Outperform.
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Texas was the upside
CleanSpark’s one signed lease is at Sandersville, Georgia: 20 years, about $6.6 billion of contracted revenue. The same tenant holds exclusivity over up to 885 MW in Texas.
Analysts expect revenue of $592 million for fiscal 2026, which ended in September, down from $766 million, and $769 million in fiscal 2028, when Sandersville’s first hall is due:
Tuesday’s result shouldn’t move those estimates much, since they rest on Georgia. The Texas campuses take the hit: B. Riley’s July model valued the two unleased sites at about $10.9 billion, several times CleanSpark’s market value. And Austin County, home to CleanSpark’s Sealy site, had already adopted a temporary moratorium on AI data centers.
The stock traded at 3.3x forward sales at the last close, just under its 3.5x five-year average:
Riot just signed in Texas
Riot’s deal is the counterpoint: a 15-year, roughly $28 billion lease of its whole Corsicana campus to a frontier AI lab. Its phases come online through July 2028, all under the new governor.
IREN’s Sweetwater site in Texas is in development, and MARA’s 2 GW site in Matagorda County still needs ERCOT and interconnect approvals. IREN reports Thursday and MARA on Monday: will either say the election slows those plans?
Waiting on Texas
CleanSpark can’t lean on mining in the meantime. In the June quarter, its $52.5 million of gross profit didn’t cover $99.9 million of miner depreciation.
Bottom line: I’d wait for a signed Texas lease before buying this dip. Of course, Riot’s deal shows AI labs still want Texas power.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
