Within Profitable Data Center Businesses: What the Persistence of the AI Market Means

The data center infrastructure market remains in full swing, challenging pessimistic forecasts about the end of the artificial intelligence investment wave. While concerns about a potential AI bubble have significantly impacted tech stock prices, the operational reality behind the scenes tells a different story. Bitcoin miners and data center developers continue to aggressively compete for megawatts of energy, maintaining a dynamism reflected in substantial profits from M&A (mergers and acquisitions) transactions that occur quietly on Wall Street.

According to Joe Nardini, head of investment banking at B. Riley Securities, the reason is simple and fundamental: people still need energy. “The M&A activity remains active because technology companies, miners, and AI developers need power capacity,” Nardini highlights. The demand for energy from Bitcoin mining operations persists at “enormous” levels but is overshadowed by an even greater demand from artificial intelligence applications and high-performance computing (HPC). Operational data collected from data center and mining clients indicate sustained requests for facilities specifically prepared for GPU processing.

Inside Transactions: How Are Assets Being Valued

The pricing structure for data center transactions varies drastically depending on the quality of available energy and geographic location. In competitive scenarios where electricity is high-quality and the site is strategically viable, the value per megawatt can reach impressive levels. Nardini reports witnessing negotiations with valuations exceeding $400,000 per megawatt, with potential to reach $450,000 per megawatt depending on final negotiation dynamics. In previous transactions, this level went even higher, reaching from $500,000 to $550,000 per megawatt.

Contrasting this reality is the market for problematic or less attractive locations, where “lowball” offers range between $100,000 and $250,000 per megawatt. Buyers in this segment value access to energy but disregard factors such as regional market quality or the site’s suitability for cutting-edge technology applications.

The universe of participants in these transactions has expanded significantly. Traditional buyers—Bitcoin miners, hyperscalers (large tech corporations like Amazon and Meta), and emerging AI companies—remain active. However, the seller side now includes actors beyond the native crypto ecosystem, such as operators of traditional industrial facilities who recognize the value of their energy assets. Nardini described a case where a 160-year-old industrial facility became attractive precisely because of its energy capacity, regardless of local market conditions.

In another revealing example, a private seller of a similar asset attracted interest from approximately 25 potential buyers seeking confidentiality agreements, including Bitcoin miners, multinational hyperscalers, and AI startups. This concentration of interest illustrates the scarcity of desirable capacity in the market.

Inside Market Reality: Why Is Demand Not Diminishing

After Bitcoin’s halving—an event that halves mining rewards—operators faced margin pressures even with prices near or above US$100,000. This pressure catalyzed a strategic repositioning: diversifying revenue streams through hosting AI hardware and high-performance computing services in existing data centers. This shift drove significant gains in Bitcoin mining stocks during 2025, as enthusiasm around AI swept global markets.

Concerns about high valuations and uncertain fundamentals eroded the market value of major tech names in early 2026, with investors taking profits in companies like Nvidia. Even CoreWeave, an AI infrastructure specialist, saw its shares fall more than 50% from the peak reached months earlier. However, these price fluctuations do not reflect a reduction in demand for actual data center capacity.

Nardini’s logic for maintaining optimism is operational and straightforward in its simplicity. The executives he consults consistently respond “yes” to fundamental questions: Is there demand for the built capacity? Do they have tenants? Are the tenants quality tenants? Can they charge attractive rates? The consolidated message is invariably the same: “Demand persists.”

A concrete case reinforces this assessment: Hut 8 saw its shares rise 20% after signing a 15-year lease valued at US$7 billion with FluidStack, securing 245 megawatts of IT capacity at its River Bend campus. Despite recent stock market fluctuations, these infrastructure companies receive high valuation multiples and are able to raise capital under attractive conditions.

Inside the Future: Outlook for 2026

Looking into next year, the scenario remains favorable for risk assets if interest rates decline, creating what Nardini describes as an “active risk environment”—a condition that would accelerate transaction completion in the sector. While he admits to partially defending his professional interests, Nardini bases his optimism on the operational reality he directly gathers from executives: tenants remain present, prices stay robust, and when a potential client declines a space, there is always another willing to accept.

The critical caveat Nardini presents is also the simplest: if data center developers could not rent what they build, or if they did not get the prices necessary for viability, that would be the moment for legitimate concern. For now, this situation has not materialized. “The fundamental business structure remains intact,” he concludes.

The convergence of factors—avid energy buyers, sellers obtaining excellent valuations for their assets, tenants with solid credit paying robust rates—reinforces the conviction that the dynamism of the AI and Bitcoin mining markets, despite superficial volatility, continues to offer significant opportunities for investors and operators aligned with global digital transformation.