Riot Platforms wins new $38.00 target at ATB

ATB Capital Markets analyst Martin Toner says Riot Platforms’ (Riot Platforms Stock Quote, Chart, News, Analysts, Financials NASDAQ:RIOT) new AI data centre lease materially improves visibility into its infrastructure strategy.

In an Aug. 11 update, Toner maintained his “Outperform” rating on Riot and raised his target to US$36.00 from $28. 00 His target is based on a sum-of-the-parts and multiples-based valuation.

Riot reported Q2 revenue of US$174.2-million, up 13.9% year-over-year and ahead of consensus at US$154.3-million. Adjusted EBITDA, excluding Bitcoin fair value adjustments, was US$4.9-million, above consensus for a US$1.4-million loss but below Toner’s US$18.8-million estimate.

Toner said the EBITDA miss against his forecast mainly reflected lower-than-expected data centre hosting revenue because of tenant fit-out timing, along with higher SG&A and corporate overhead tied to the data centre ramp.

The key development was a 20-year data centre lease with a frontier AI lab for 191 megawatts of critical IT capacity at Riot’s Rockdale campus. The agreement is expected to generate US$9.1-billion of base contract revenue, or US$16.1-billion if two five-year extensions are exercised.

The facility is expected to generate US$365-million to US$411-million of average annual net operating income. Phase 1 is targeted for delivery in December 2027, with Phase 2 expected in June 2028.

Riot also delivered its initial 25-megawatt deployment for AMD on time and on budget, while construction continued on AMD’s 25-megawatt expansion. The total 50 megawatts contracted with AMD is expected to generate US$51-million of annual net operating income.

Management also disclosed that the full one-gigawatt Corsicana campus, representing 756 megawatts of critical IT load, is under a non-binding letter of intent with a single tenant. Toner said the site represents more than US$1-billion of potential annual rent.

Riot ended the quarter with more than US$1.2-billion of liquidity, including US$548.9-million of cash and 11,380 Bitcoin.

Toner expects Riot to generate Adjusted EBITDA, excluding Bitcoin fair value adjustments, of US$13.1-million on revenue of US$639.4-million in fiscal 2026, improving to US$207.8-million on revenue of US$875.8-million in fiscal 2027.

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