Bernstein cut its share price targets for seven Bitcoin miners by as much as 54% due to uncertainty surrounding AI data center projects following the Texas election and tighter financing conditions.
According to analyst assessments cited by CoinDesk, Democrat Gina Hinojosa’s victory in the Texas gubernatorial race has changed the calculations for Bitcoin miners’ plans to generate revenue from AI. Hinojosa wants new data center approvals paused until rules are established to protect the public from higher electricity and water costs.
Energy connections are critical for miners that have spent the past two years offering AI companies access to their cheap electricity and large facilities. More than half of the existing or planned power capacity of miners tracked by Bernstein that are moving into AI infrastructure is located in Texas. As a result, longer permitting timelines could also affect future revenue expectations.
How much were the price targets for each Bitcoin miner cut?
Bernstein assigned lower valuations to the earnings companies are expected to generate by providing data center space and power to AI customers. The price target changes for the seven companies are as follows:
- Cipher Mining: from $23 to $15.
- IREN: from $100 to $55.
- TeraWulf: from $36 to $20.
- Core Scientific: from $32 to $19.
- Riot Platforms: from $35 to $18.
- MARA Holdings: from $17 to $10.
- CleanSpark: from $24 to $11.
The price target cuts range from approximately 35% to 54%. CleanSpark received the largest percentage cut.
Companies with power already secured could have an advantage
Uncertainty surrounding new projects could strengthen the position of companies that have secured power connections in advance. Bernstein analyst Gautam Chhugani noted that although IREN, Riot, and Cipher are highly exposed to Texas, they have approved power capacity measured in gigawatts. According to the analyst, difficulties securing new connections could make this capacity scarcer and more valuable.
Morgan Stanley sees TeraWulf, Hut 8, and Applied Digital as better positioned. Its assessment highlights TeraWulf’s limited exposure to regulatory changes in Texas and the possibility that Hut 8 could benefit from projects shifting to Louisiana.
The bank sees greater uncertainty around Cipher’s Colchis and Galaxy Digital’s Helios II projects, as well as MARA’s expansion plans. While Riot’s existing grid connections could become more valuable, its plans to build additional data center capacity at the same sites could face permitting obstacles.
The risk is not limited to Texas
According to Goldman Sachs estimates, states expected to tighten data center regulations account for approximately 45% of planned capacity in the United States; Texas alone accounts for approximately one-quarter of the country’s planned capacity. SemiAnalysis estimates that approximately 30% of the capacity expected to come online in 2028 is in Texas.
Analysts are focused less on data center investments coming to a complete halt than on longer approval timelines and rising costs. Miners with operating facilities, approved power capacity, and signed AI hosting agreements could have an advantage in this environment, while projects relying on future grid connections could face delays.
Not investment advice.