J.P. Morgan maintained an overweight rating and a $20 price target for Riot (NASDAQ: RIOT), despite the miner posting a 15% sequential decline in fourth-quarter revenue to $157 million, according to a Tuesday research note from the bank.
The $20 target price is anchored by Riot’s 1.7-gigawatt portfolio across its Rockdale and Corsicana sites in Texas. J.P. Morgan said these sites should see strong interest from neocloud and hyperscaler providers since they are tier-one market locations for AI workloads.
Riot’s recent AMD agreement adds a premium to J.P. Morgan’s valuation. Riot energized the first 5 megawatts of critical infrastructure just one month after signing the contract, with the remaining 20 megawatts on track for delivery in May 2026. If Riot and AMD exercise options to extend the deal, Riot could net $1 billion from the partnership.
Riot’s team is currently marketing further capacity at its 700 MW Rockdale facility and 1,000 MW Corsicana site to prospective AI/HPC tenants, the note claims. Analysts Reginald L. Smith and Charles Pearce highlighted the negotiating leverage held by the infrastructure provider as a catalyst for future revenue.
Institutional support also bolsters the valuation, with Fidelity Investments taking an 8% stake in November 2025 and activist investor Starboard Value projecting the stock could reach $52.60 if the AI infrastructure pivot succeeds.
Conversely, surging production costs act as J.P. Morgan’s primary ding against Riot in its valuation model. J.P. Morgan estimates that Riot’s total production cost per bitcoin mined surged 34% sequentially to $97,200 during the fourth quarter. Direct power costs hit $60,600 per coin, representing a 31% sequential increase that cut into Riot’s profitability margins.
Cash-modified earnings dropped to $13 million, falling short of the $21 million J.P. Morgan previously estimated. Cash-based selling, general and administrative expenses rose 39% quarter-over-quarter to $36,600 per coin. A lower average bitcoin price and a 6% drop in bitcoin production compounded these financial headwinds for the quarter.
The timeline for securing new AI/HPC tenants also applies downward pressure to near-term target revisions. The J.P. Morgan report noted that enterprise agreements take roughly 9 to 12 months to materialize. Because marketing for the Corsicana site only began in mid-2025, it could be several months until Riot announces another AI deal, the note estimates.
