Riot Platforms’ Powered Land Lease Lowers Build Costs, But Texas Election Adds Timing Risk, Analysts Say

Riot Platforms Inc. (NASDAQ:RIOT) shares are trading lower on Thursday, in line with a broader decline across crypto-linked stocks as Bitcoin (CRYPTO: BTC) falls and investors assess the outcome of the midterm elections.

Meanwhile, Riot Platforms has signed a 15-year powered land lease at its Corsicana, Texas, site, a move drawing mixed analyst perspectives.

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In a published note, Chardan analyst Bill Papanastasiou said the agreement reduces Riot’s construction spending requirements and shifts operating risk to the tenant. However, Needham analyst John Todaro noted that the Texas election outcome introduces uncertainty around the timing of the project.

A powered land lease means Riot delivers land with electrical infrastructure and the tenant installs and runs the computing equipment. Needham identified the tenant as Anthropic, the same artificial intelligence lab already leasing space at Riot’s Rockdale site.

Lease Structure Lowers Costs

Papanastasiou wrote that the terms show the Corsicana site gave Riot negotiating leverage. He noted the tenant bears substantially all operating and technology risk and Riot carries no development risk on data halls or cooling.

Todaro said the lease covers 910 megawatts of computing capacity and earns rent comparable to traditional Tier-3 data center leases, which are fully built facilities. Needham puts Riot’s capital spending at about $6 million per megawatt, against $11 million to $12 million for a Tier-3 build. The firm calculates a 33% yield on that cost.

Financing Plans Matter

Chardan estimates total capital spending at $5.5 billion. Riot would pay one-third upfront from cash, debt or both. The tenant would reimburse the rest in phases once each phase is delivered and paying rent. Chardan’s discounted cash flow analysis values the contract at $17.25 per share.

Needham said management prefers project debt and plans to start that process in 2027. If that financing is unavailable on comparable terms, Anthropic would fund the reimbursements first and recover them through rent credits.

Texas Election Risk

Papanastasiou said Riot’s stock diverged from peers after the midterm elections. He said investors cut exposure to companies with large power pipelines because Governor-Elect Gina Hinojosa may pressure new data center builds. He added that Riot’s portfolio includes only fully approved power, and management does not expect environmental permitting problems.

Todaro agreed management sees no further approvals as necessary. He said Corsicana has no air permits, and management does not consider them required. Needham’s base case has the site moving forward, but it warned that the governor-elect could use permitting to slow projects.

"Following the election, we believe the Texas data center market now has increased risks of delays and push-outs," Todaro wrote.

Chardan raised its price forecast to $32 from $27.50 and kept its Buy rating. Needham raised its forecast to $31 from $30, also with a Buy rating, but lowered its valuation multiple. It cited the market’s likely preference for Tier-3 facilities over powered land sites, as well as Texas risk.

Chardan said it may name another top pick if Riot’s stock approaches its target or regulatory pressure proves minimal.

RIOT Stock Price Activity: Riot shares were down 3.16% at $14.89 at the time of publication on Thursday, according to Benzinga Pro data.

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