Multi-Factor Growth in the Data Center Market: Bitcoin and AI's Energy Needs Revitalize Wall Street

Concerns about artificial intelligence and overvaluations have led investors to sell most tech stocks, but another story continues at Wall Street deal tables. According to B. Riley Securities Investment Banking Head Joe Nardini, merger and acquisition activity remains vibrant—because a fundamental truth has not changed: Bitcoin miners and data center developers still require significant amounts of electrical capacity.

" Mergers and acquisitions are still happening because people still need power," Nardini told CoinDesk in an interview. This indicates that the multifaceted market dynamics (Bitcoin, AI, high-performance computing, and cloud services) are reactivating all layers.

Energy Demand Industry Foundation: What Is Megawatt Pricing?

According to Nardini, electricity demand “remains large.” More importantly, demand from artificial intelligence and high-performance computing (HPC) sectors is “even larger.” Data center and mining clients report sustainable demand for GPU-supported facilities, with the dollar amount per megawatt for assets in high-quality energy and favorable locations becoming “very attractive.”

From a market dynamics perspective, deals in premium locations can exceed $400,000 per megawatt, potentially reaching as high as $450,000. Nardini noted that he has previously seen deals priced between $500,000 and $550,000 per megawatt. Meanwhile, demand for less desirable or problematic locations persists, with capacities sometimes receiving “low bids” between $100,000 and $250,000.

Hut 8 Case: $7 Billion Deal Signaling Market Vitality

A concrete proof of market dynamics emerged in December 2025. Hut 8 signed a 15-year, $7 billion lease agreement with Fluidstack to provide 245 megawatts of IT capacity at the River Bend campus. As soon as the news broke, Hut 8 shares surged by up to 20%.

“Despite the recent wave of sales, these companies were well rewarded with higher valuation multiples and attractive valuations,” Nardini said. This is a clear sign that the fundamentals of the market remain solid. Since the Hut 8 incident, firms developing similar quality assets have also attracted similar interest.

Buyer and Seller Dynamics: Who Is Seeking Energy Capacity?

On the buy side, the market is represented by large tech companies (hyperscalers) providing cloud infrastructure, AI firms, and Bitcoin miners. On the sell side, it’s not just crypto-focused players; traditional industry sectors are also involved.

Nardini has witnessed projects involving the redevelopment of old factories, such as 160-year-old industrial plants. While market conditions are roughly similar, the primary driver is energy capacity. In another example, a seller of a similar type of asset received confidentiality agreement (NDA) requests from about 25 potential buyers—including Bitcoin miners, hyperscalers, and AI companies.

This dynamic creates a strategic differentiation for asset owners: sell to a hyperscaler or try to become a developer themselves? Nardini said that industrial companies with power sources, but with old, idle, or semi-idle facilities, are seriously considering sales to the AI/HPC and Bitcoin ecosystems. For example, he pointed to a private client converting old office buildings into modular power capacity—this company “is building 30-megawatt units at a time” and is currently seeking additional funding to scale.

The most striking indicator was that in at least one negotiation, a tenant was willing to pay the rent upfront before completion. This is a sign of how scarce the demanded capacity is.

Post-Bitcoin Halving: Why Are Miners Turning to AI?

After Bitcoin’s halving in April 2024, rewards were cut in half. Despite the reduction, BTC price remains around $79.01K. However, miners are facing serious margin pressure and are increasingly hosting AI and high-performance computing hardware in their existing data centers. This strategy offers an adaptation story among Bitcoin miners: extracting maximum value from energy assets.

This situation has triggered sharp rises in some Bitcoin mining stocks this year, coinciding with the AI enthusiasm spreading through the market.

Has the Artificial Intelligence Boom Declined? Wall Street’s Answer Is No

In early 2025, growing concerns about AI and high valuations pushed investors to realize profits, leading to significant losses for Nvidia and other tech names. CoreWeave shares also declined and are now more than 50% below their June peak.

Does this mean the end of the AI trend? Nardini’s answer is clear: no. He says it’s enough to look at simple logic. Is there demand for data center capacity from clients? “Yes.” Are there tenants? “Yes.” Are they high-quality tenants? “Yes.” Are they paying good rent rates? “Yes.”

The message Nardini heard in multiple meetings is consistent: “So, demand still exists.” Developers with data center capacity are seeing demand from multiple high-credit tenants at good rates, so the core economics of the business remain solid.

Expectations for 2026: Falling Interest Rates and Risk Assets

Looking ahead to 2026, Nardini notes that if interest rates fall, the environment will still support risk assets, which he describes as a potential “risk-taking environment” that will positively influence deal-making in his sector. While he admits he might be slightly “defensive” about his position, operational realities shared by executives continue to keep him optimistic.

Tenants are in place, prices remain strong, and if one customer cannot take a space, another will. His simple warning: if developers cannot lease what they build or cannot get the prices they need, then it’s time to worry. For now, he says he hasn’t heard of such a scenario.

“The fundamentals of the business continue to stay strong,” Nardini said. He concluded with a sharp assessment: “The demand for power and artificial intelligence high-performance computing (HPC) data center capacity continues unabated. Data center developers with capacity are seeing demand from multiple high-credit tenants at good rates, so the core economics of the business remain solid.”

The high demand for energy from buyers and the good valuations for assets among sellers further reinforce Nardini’s confidence. “AI trading is still alive,” he said. And this continues at Wall Street deal tables.