Key Takeaways
- Riot Platforms rose 29% in the week to Nov. 10 after a roughly $28 billion lease of its Corsicana campus to Anthropic.
- The lease costs Riot about half a typical build, and management doesn’t expect to sell stock to fund it.
- Most of Wall Street raised its targets, and Riot rallied with AI data center stocks on Nov. 6 after IREN’s results.
- The case for Riot rests on refinancing its $573 million bridge loan, due Dec. 31, without new stock.
Riot Platforms (RIOT) rose 29% from the Nov. 3 close to the Nov. 10 close, even as bitcoin slid toward $74,000.
On Nov. 4, it leased its entire Corsicana, Texas, campus to Anthropic for about $28 billion over 15 years. Then AI data center stocks rallied on IREN’s results, and Morgan Stanley raised its Riot target while cutting Cipher Digital (CIFR).
Rent on all 910 megawatts
Anthropic owes rent on all 910 megawatts whether it uses them or not: about $1.8 billion a year, at an expected NOI margin of roughly 99%. Riot’s cost is about $6 million per IT megawatt, half the capital of a Tier 3 build, and $4 million of that is paid only after each phase pays rent.
H.C. Wainwright, which raised its target to $35, called the lease a “home run.” CEO Jason Les said Riot does “not currently anticipate issuing equity to fund our announced projects.”
TIKR tracks 22 analysts on Riot Platforms. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Riot Platforms, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Riot Platforms’ Analyst Ratings
Wall Street caught up fast
Bernstein, Morgan Stanley and JPMorgan raised their targets to $30, $41 and $28. Jefferies went further on Nov. 10, upgrading Riot to Buy on a lease with “highly favorable economics.”
Morgan Stanley’s split calls come down to who pays for the build. Riot puts up just $2 million per megawatt before rent starts. Cipher’s builds run $9 million to $11 million per critical IT megawatt, and it still has to show it can fund its next lease without heavy stock sales.
Analysts now expect $1.75 billion of Riot revenue in 2028, up from $1.21 billion in late October:
On forward sales, Riot traded at 8.5x on Nov. 9, and the stock has closed higher since. That’s above its 6.2x five-year average but about half its 16.2x peak in June:
The bridge loan is due Dec. 31
The next test is the $573 million Rockdale bridge loan due Dec. 31, and Riot says it’s finalizing an investment-grade backstop for it. If Corsicana’s project debt doesn’t come on comparable terms, Riot repays the tenant through rent credits at 12% a year, according to its 10-Q.
Keefe, Bruyette & Woods downgraded Riot to Market Perform on Nov. 11, even as it raised its target to $23, citing the company’s heavy reliance on Anthropic and the lease’s lack of investment-grade credit support.
The case for Riot holds as long as that loan is refinanced without new stock. A share sale or a switch to those 12% rent credits would break it fast.
So what is Riot Platforms stock actually worth?
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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!
