Summary I rate RIOT a hold at $9.09/share, reflecting a balanced outlook amid operational growth and competitive pressures in data center hosting. Riot Platforms’ expansion at Corsicana and the Rhodium acquisition may boost power and hash rate, but legal and market risks can potentially persist. The data center hosting market is highly competitive, with hyperscalers like Oracle dominating the market. Riot’s Bitcoin mining profitability may be pressured by rising power costs and Bitcoin price volatility, limiting near-term upside despite strong Bitcoin treasury holdings. Riot Platforms ( RIOT ) is in the process of expanding its Corsicana facility from 400MW to 600MW in capacity with the intention of hosting third-party hyperscalers at its data center site. With the ambition of navigating into a new market opportunity, I believe Riot may face certain hurdles in hosted shared space given the current competitive market environment. Valuing RIOT as an organization, I believe shares should be priced at $9.09/share at 5.41x eFY26 price/sales. I am recommending RIOT shares with a hold rating. Riot Platforms Operations Corporate Reports Riot closed the acquisition of certain assets of Rhodium at the Rockdale Facility in Q1’25. The acquisition included Rhodium’s 125MW of power capacity, as well as its existing operating assets at the facility. The acquisition was valued at $185mm, inclusive of $49mm in Riot common shares. In addition to acquiring the facility, compute capacity, and power capacity, Riot and Rhodium entered into an agreement to conclude all litigation. Prior to the announced acquisition, Rhodium filed a $300mm suit against Riot as a result of Riot’s acquisition of Whinstone and the cancellation of Rhodium’s power supply agreement for 100MW of power. Years prior, in 2023, Riot filed a suit against Rhodium over an alleged $26mm in unpaid fees. Staying on the topic of litigation, investors filed a suit against Rhodium in December 2024, suggesting that Rhodium misled investors by concealing critical information and engaging in self-dealing. The suit also suggests that Rhodium failed to disclose the pending sale of the organization’s operating facilities to Riot, creating conflict over power contracts. Given that Rhodium’s sale was an asset sale as opposed to the company being absorbed by Riot, Riot may be somewhat shielded from the suit. Other legacy suits were filed in Riot’s March 2025 10-Q , bearing no mention of the investor suit. As a result of the acquisition, management is anticipating increased hash rates, reduced operating losses, and gained power capacity for future development. At the end of Q1’25, Riot had 33.7EH/s in capacity, producing a total of 1,530 Bitcoin in the quarter. Riot began purchasing Bitcoin in Q4’24 to bolster its treasury while leveraging its holdings for a collateralized $100mm credit facility through Coinbase . Accordingly, this credit facility will ideally provide Riot with adequate financing to slow the dilution of the float. Riot ended Q1’25 with 19,223 Bitcoin. Using $105k as the base price, Riot’s Bitcoin holdings amount to $2b. TradingView As part of its growth strategy, Riot invested a substantial proportion of its capital outlay for Q1’25 in the development of its 600MW substation expansion at the Corsicana facility in Navarro County, Texas. According to Riot’s website , the facility currently has 400MW in capacity, with the option to expand to 1GW. Using a like-for-like approach, the expansion to 600MW should get the facility to 23.55EH/s in capacity. The data center buildout may also involve sourcing data center tenants, primarily targeting hyperscaler customers. Though data center hosting may be an appealing market for Riot, Riot will be competing with Oracle Corp . ( ORCL ), which develops purpose-built data centers with Oracle Cloud Infrastructure as well as engages in a MultiCloud strategy, developing data center sites for hyperscaler customers. The growth factor management mentioned was that the existing GenAI capacity calls for 5GW of capacity with the expectation of growing to 30GW by 2030. Though this may be the case, I suspect a significant proportion of capacity will derive from enterprises rather than consumers, potentially limiting the full, total addressable market to a narrower figure. In addition to this, hyperscalers are investing in developing their data center footprints given the size and scale of compute capacity needed to operate AI models on their infrastructure. Referencing Oracle’s data center developments, OpenAI has partnered with Oracle to develop its first 1.2GW site in Abilene, Texas , and will likely continue working with Oracle for new site developments. What makes Oracle’s data center business stand out above Riot is that Oracle develops modular, autonomously operating data center facilities. Though I have no doubt that Riot will be successful in enticing tenants for its AI/HPC data center site, I believe that the data center hosting business will be fierce, particularly when considering the total cost to operate. The area in which I can see Riot competing is in its engineering and manufacturing business with ESS Metron for critical switchgear. This business could potentially add value to third-party customers in the data center business and may help debottleneck the electrical equipment market. Riot Platforms' Financial Position Corporate Reports One of the biggest costs Riot must address in Bitcoin mining, net of machine depreciation, is the cost of power. In the organization’s FY24 presentation , Riot reported that the cost to mine a single Bitcoin was 96.9% of the value of the coin. Corporate Reports Granted, the price per Bitcoin is substantially higher today when compared to all of FY24; however, power consumption may be a persistent headwind, particularly as electricity prices are set to increase with power demand for growing data centers and industrial footprints. Net of Bitcoin price appreciation, increasing power costs can create significant headwinds for Riot in the coming quarters, particularly as more connected infrastructure is added to the grid. TradingView Looking to eQ2’25, I’m forecasting Riot to generate $152mm in net revenue, with a diluted EPS of -$0.23/share. This is predicated on strong Bitcoin mining growth and sales for the quarter as a result of the high value of Bitcoin quarter-to-date. Risks Related to Riot Platforms Bull Case The price of Bitcoin has created a more appealing operating environment for Riot, potentially leading to the organization delivering positive adjusted EBITDA for eQ2’25. With data center power capacity being widely constrained, the organization may be well-positioned to advantageously take on hosted customers, potentially expanding its brand beyond Bitcoin mining and engineering operations. Bear Case The data center environment is highly competitive, potentially creating certain challenges for Riot to enter the space. The organization has also faced legal challenges relating to contractual power distribution that may deter third-party hyperscaler customers. Bitcoin remains highly volatile and may not sustain its $105k+/- price range, potentially impacting Riot’s revenue stream going forward. Valuation & Shareholder Value Corporate Reports RIOT currently trades at 1.61x price/BV BTC, assuming a $105k price per Bitcoin. This is relatively comparable to its competitor CleanSpark ( CLSK ), which trades at roughly 1.89x, considering its 12,502 Bitcoin holdings. Despite this factor, investors in RIOT must consider its other operating unit in engineering and its aim to act as a data center host, creating a certain operating complexity when compared to CleanSpark. Valuing RIOT as an organization, I believe shares should be priced at $9.09/share at 5.41x eFY26 price/sales. I am recommending RIOT shares with a hold rating. Corporate Reports Using the model: the valuation table above references my financial forecast in the firm’s “financial position” section and ties it to the stock’s historical trading premiums. The trading premium array is derived through the normal operating cycle, with the blue-sky scenario being the stock’s peak multiple and the gray-sky scenario being the lowest point. The target multiple aims for the midpoint, or the most likely trading range for the company’s stock. The trading multiples from there are set to a probability factor based on the likelihood of the stock trading at that premium based on its historical presence. From there, the trading multiple is tied to the probability factor to derive its relative market cap and relative multiple.
