Riot Platforms (NASDAQ:RIOT) stock rose 5% on Wednesday after activist investor Starboard Value delivered a letter urging the company to move more quickly to secure significant artificial intelligence and high-performance computing (AI/HPC) data center deals.
In its communication to Riot’s leadership - addressed to Chief Executive Officer Jason Les and Executive Chairman Benjamin Yi - Starboard highlighted the company’s 1.7 gigawatts of fully available power across its Corsicana and Rockdale, Texas campuses. The investor said that those assets position Riot to execute "high-quality AI/HPC deals" with "attractive deal economics."
Starboard, which described itself as a "significant stockholder" in Riot, acknowledged Riot’s recently announced arrangement with Advanced Micro Devices (NASDAQ:AMD) as a "positive signal," while cautioning that the transaction represents a "small proof of concept." The letter emphasized that "time is of the essence" and called for "a renewed sense of urgency" to finalize larger and more substantive agreements.
The AMD agreement, announced on January 16, covers an initial 25 megawatts of critical IT load capacity and includes the potential to expand to 200 megawatts. Riot projects the deal will produce $311 million in revenue over an initial 10-year term, with expected margins of approximately 80% EBITDA.
Starboard pointed out that Riot’s share price has lagged peers that have closed major AI/HPC contracts, despite what the investor characterizes as Riot’s superior positioning and assets. Using recent industry transaction benchmarks, Starboard estimated that full monetization of Riot’s power capacity could yield more than $1.6 billion in annual EBITDA.
Based on its calculations, the activist investor suggested Riot’s potential equity value derived from AI/HPC data centers at the Corsicana and Rockdale sites could fall between $9 billion and $21 billion. Translating that range to per-share terms, Starboard indicated the stock might be worth between $23 and $53 per share - figures that sit above the company’s recent trading levels. Shares closed yesterday at $14.65.
Context and implications
The Starboard letter frames Riot’s Texas power assets as a strategic lever for entering larger-scale AI and HPC hosting arrangements. The AMD deal is presented as evidence that the company can transact in this market segment, but Starboard urges management to treat that agreement as a preliminary step rather than the end state.
For investors and market participants, the central issue is whether Riot can convert available capacity into multi-megawatt, long-term contracts that deliver high-margin revenue and materially change the company’s earnings profile.
What to watch next
- Whether Riot responds publicly to Starboard’s recommendations and outlines a timetable for securing additional large AI/HPC agreements.
- Progression of the AMD arrangement from its initial 25 megawatts toward any expansion up to the 200 megawatt potential.
- Market reaction to any new, material contracts and subsequent effects on Riot’s reported revenue and EBITDA expectations.