Anthropic Deal as Key Driver
Bernstein analysts led by Gautam Chhugani raised their price target on Riot to $35 from $30, maintaining an Outperform rating after the company signed a $9.1 billion data center agreement with a “leading frontier AI lab,” reportedly Anthropic.
The 20-year colocation agreement is expected to generate around $457 million in annual recurring revenue.
Bernstein estimates the contract could produce annual net operating income of between $365 million and $411 million, with required capital expenditure of approximately $2.1 billion to $2.3 billion.
Riot has also secured a $573 million interim financing facility from Morgan Stanley to fund initial equipment procurement, The Block reported.
The economics of the latest agreement prompted Bernstein to significantly upgrade its assumptions for Riot’s AI colocation operations.
Bernstein estimates Riot will need another $3.7 billion of secured financing, equivalent to roughly 90% of the project capital expenditure required under its modeled buildout.
