This company’s deal with Anthropic is huge, analyst says

Riot Platforms’ (Riot Platforms Stock Quote, Chart, News, Analysts, Financials NASDAQ:RIOT) new 910-megawatt data centre lease at its Corsicana campus in Texas could generate approximately US$28-billion in contracted revenue over 15 years, prompting ATB Cormark Capital Markets analyst Martin Toner to raise his target to US $50.00 from US$30.00 on Nov. 5.

Toner maintained his “Outperform” rating, arguing that the agreement with Anthropic significantly improves Riot’s long-term earnings outlook while requiring less capital investment than comparable data centre projects.

“RIOT kept a remarkable year of AI Data Center development going when it announced a 910MW Anthropic lease with earnings,” Toner said. “The deal includes capital lite, high return features that we have not seen from other deals by any company.”

The 15-year agreement covers the entire Corsicana campus and is expected to generate approximately US$1.8-billion in average annual rental revenue, with a net operating income margin of approximately 99%. Toner estimates an unlevered return on cost of 33%, supported by capital expenditures of approximately US$6-million per megawatt, roughly half the cost of a conventional Tier 3 data centre. Under the agreement, Riot will provide powered land and infrastructure connections, while the tenant will construct the buildings and cooling systems. This arrangement reduces Riot’s construction costs and exposure to development risks.

The analyst said the agreement provides approximately 20% more leasable capacity from the same one gigawatt of power than comparable projects. Combined with existing commitments at Rockdale and from Advanced Micro Devices, Riot now has 1,151 megawatts of contracted capacity representing approximately US$38-billion in revenue.

Management expects the projects to generate more than US$2-billion in annual net operating income once fully operational in 2029.

“At ~3.0x 2029 NOI, the execution risk implied in the stock price is extreme,” Toner said.

Riot reported third-quarter revenue of US$181.4-million, exceeding Toner’s US$155.6-million estimate and consensus of US$160.8-million. Adjusted EBITDA reached US$191.3-million, although the result included a US$171.9-million gain related to changes in bitcoin’s fair value.

Toner said the Corsicana development will be the company’s principal growth driver, with capacity scheduled for delivery between September 2027 and July 2028. He expects Riot to fund much of the construction through project financing, reducing the potential need to issue additional shares.

Toner increased his fiscal 2027 revenue forecast to US$774-million from US$702.9-million and his Adjusted EBITDA estimate to US$250.9-million from US$216-million. For fiscal 2028, he raised his revenue forecast to US$1.41-billion from US$834.9-million and his Adjusted EBITDA estimate to US$959.9-million from US$368.5-million, reflecting the expected contribution from Corsicana.

Toner thinksthe shares remain attractively valued relative to the company’s contracted earnings potential, although construction delays, financing costs and regulatory approvals remain risks.

His revised target combines discounted cash flow and sum-of-the-parts valuations, incorporating a 70% probability of completing the full Corsicana development.

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