AI trade isn’t dead: An inside look into Wall Street's lucrative data center deals
Investment banker Joe Nardini asserts that Wall Street dealmaking for data centers remains robust, driven by sustained demand from AI/HPC and bitcoin miners for power.Summary
Despite recent market selloffs impacting major tech stocks, investment banker Joe Nardini of B. Riley Securities confirms that the AI trade and data center dealmaking are very much alive. The fundamental driver is the massive, sustained demand for power from both AI/High-Performance Computing (HPC) clients and bitcoin miners, with AI pull being even stronger.
Nardini notes that clients confirm they have demand, tenants, and are securing good rates for their data center capacity, validating the core economics. This demand is leading to high valuations, sometimes exceeding $400,000 per megawatt in competitive situations, though less desirable locations fetch lower bids. Buyers include hyperscalers, AI firms, and miners, while sellers are increasingly including owners of older industrial facilities looking to capitalize on the power-hungry ecosystem.
Looking ahead, Nardini remains constructive, believing the environment favors risk assets if interest rates fall. He cautions that worry would only set in if developers cannot lease new capacity at desired prices, but currently, he hears no such concerns, concluding that the core business remains intact.
(Source：CoinDesk)