Overview
Keefe, Bruyette & Woods (KBW) on Tuesday increased its price target for Riot Platforms (NASDAQ:RIOT) to $23.00 from $16.00, while maintaining an Outperform rating on the shares. The research firm tied the target revision to Riot’s recently announced 10-year lease with Advanced Micro Devices (AMD) at the Rockdale, Texas site, which initially covers 25 MW of critical IT load and includes the potential to expand up to 200 MW.
Why KBW raised the target
KBW sees the AMD agreement as providing Riot with a high-quality tenant and generating meaningful, organic demand visibility that could extend to the full 200 MW potential. The research note also points to the lease as evidence of early traction in Riot’s pivot toward high-performance computing colocation services.
The firm emphasized that the AMD lease effectively commits roughly 21% of the Rockdale site’s capacity to a long-duration net operating income (NOI) profile that KBW characterizes as structurally below tier-3 builds. Despite that structural differential, KBW believes there is notable value creation as Riot methodically leases out its tier-3 inventory.
Site-level capacity and strategic positioning
KBW calls out Riot’s Corsicana and Rockdale facilities as among the most strategically located and conversion-ready sites in Texas within a market KBW describes as a tight HPC colocation landscape. The research firm's new $23 target is derived from a sum-of-the-parts framework that aggregates value from the AMD lease, planned expansions, tier-3 Corsicana capacity, and the remaining corporate value.
Company developments cited by analysts
Beyond KBW’s update, Riot has disclosed other material steps at Rockdale. The company purchased 200 acres of Rockdale land for $96 million, a transaction the company funded by selling about 1,080 bitcoin, and the purchase confers full ownership of the property. The acquired parcel also carries a 700 MW grid interconnection.
Other sell-side analysts have reacted favorably to these developments. Needham increased its price target to $30 and maintained a Buy rating. BTIG reiterated a Buy rating with a $28 price target, citing expansion potential at the data center. Piper Sandler continued to rate Riot Overweight with a $26 price target, naming the company a top pick for future earnings seasons.
Context for investors
KBW noted that the stock does not present as inexpensive on current measures, yet the research house sees meaningful upside if Riot executes on leasing its tier-3 capacity - quantified in KBW’s note as 1,039 MW net across Corsicana and Rockdale. The pathway to that upside, according to KBW’s valuation approach, hinges on the pace and scale of leasing and any expansions captured under existing tenant relationships.
Key takeaways
- KBW raised its Riot Platforms price target to $23.00 from $16.00 and kept an Outperform rating.
- The 10-year, 25 MW AMD lease at Rockdale, with potential expansion to 200 MW, is central to KBW’s revised valuation.
- Riot’s land purchase at Rockdale and its 700 MW grid interconnection, along with other analysts raising targets, underscore a coordinated effort to expand HPC colocation capacity.
Risks and uncertainties
- Valuation risk - KBW notes the stock does not appear inexpensive, indicating potential near-term valuation sensitivity in the market.
- Contract mix and NOI profile - committing about 21% of Rockdale’s capacity to a long-duration NOI that KBW considers structurally below tier-3 builds may affect overall margin and revenue mix.
- Execution risk tied to leasing - KBW’s upside scenario depends on Riot steadily leasing its tier-3 capacity; the pace and scale of that leasing are uncertain.
Conclusion
KBW’s upgrade to a $23 target reflects a valuation that combines the immediate revenue visibility from the AMD lease with expansion optionality and Riot’s remaining tier-3 assets. Other brokers have similarly adjusted targets upward or reiterated Buy/Overweight views, signaling analyst confidence in the company’s data-center strategy while also highlighting the importance of execution on leasing and capacity conversion.