Bernstein Cuts Price Targets on Seven Bitcoin Miners After Democrats’ Texas Win Threatens AI Data Center Boom

Research firm Bernstein cut its target prices on seven Bitcoin (CRYPTO: $BTC) miners by as much as 54% on Wednesday after Democrats’ surprise win in the Texas governor’s race raised the risk of delays to AI data center projects.

Texas is central to the miners’ push into AI hosting. More than half of the power capacity held or planned by the miners-turned-AI developers Bernstein covers sits in the state, according to senior analyst Gautam Chhugani. SemiAnalysis puts Texas at nearly 30% of the data center capacity expected to come online in 2028.

Democrat Gina Hinojosa defeated Republican incumbent Greg Abbott, who had been heavily favored, and wants to halt new data center approvals until Texas adopts rules protecting residents from higher electricity and water costs. Goldman Sachs (NYSE: $GS) economists expect temporary pauses in Texas, Georgia and Michigan, though not lasting ones, since data centers are not a top priority for most voters.

According to the research note, Bernstein expects the pause to continue. “We would expect the data center pause to continue and any data center potential legislation to remain in gridlock,” Chhugani wrote. Citing tighter financing markets and the Texas uncertainty, the firm now values miners’ AI hosting businesses at 12 times forward EBITDA, a lower valuation on the earnings they expect from renting space and power to AI customers.

Bernstein kept Outperform ratings on TeraWulf (NASDAQ: $WULF), IREN (NASDAQ: $IREN), Cipher Digital (NASDAQ: $CIFR), CleanSpark (NASDAQ: $CLSK), Riot Platforms (NASDAQ: $RIOT) and Core Scientific (NASDAQ: $CORZ) and a Market Perform on MARA Holdings (NASDAQ: $MARA), but cut its target prices on all seven. TeraWulf’s now sits at $20 (previously $36), IREN’s at $55 (previously $100), Cipher Digital’s at $15 (previously $23), CleanSpark’s at $11 (previously $24), Riot’s at $18 (previously $35), Core Scientific’s at $19 (previously $32) and MARA’s at $10 (previously $17). The cuts range from about 35% to 54%.

Other analysts moved too. KBW downgraded CleanSpark and Cipher Digital to Market Perform from Outperform, cutting its target prices to $9.50 on each (previously $11.50 and $11). Two brokerages went the other way on Riot the same day the company announced a $28 billion lease for its Corsicana campus. Cantor Fitzgerald reiterated Overweight and hiked its target price to $37 from $24. HC Wainwright reiterated Buy and hiked its target to $35 from $30. Cipher Digital had already drawn target cuts on Tuesday from seven brokerages, including Needham, Northland and Wells Fargo, according to Cryptoprowl’s stock ratings.

Bernstein did not paint every miner with the same brush. IREN, Riot and Cipher have the most Texas exposure, but each also holds approved power capacity measured in gigawatts that Chhugani said “may be considered scarce and valuable.” Companies that already secured power could benefit if tougher rules make it harder for others to connect to the grid.

Morgan Stanley (NYSE: $MS) drew a similar line between projects already underway and those awaiting approval. In a note led by Stephen Byrd, the bank flagged Cipher, MARA and Galaxy Digital (NASDAQ: $GLXY) as facing greater uncertainty in Texas, and it will revisit Cipher’s Colchis site, Galaxy’s Helios II project and MARA’s expansion plans. It sees TeraWulf, Hut 8 (NASDAQ: $HUT) and Applied Digital (NASDAQ: $APLD) as better placed. Riot is a tougher call, the bank said, because its grid connections at Corsicana and Rockdale could become more valuable even as plans for more capacity there could still run into trouble.

Shares reflected the split. Cipher Digital fell about 21% in Wednesday trading and IREN dropped about 11%, while Riot rose about 13%.

Not everyone sees the slowdown as bad news for AI. Goldman strategist Rich Privorotsky noted AI stocks had already been heavily sold ahead of the election, and he thinks some companies could pull spending into 2027 to get projects started before new rules take effect. If fewer data centers get built, those already operating could become more valuable.

Shares of Riot Platforms (NASDAQ: RIOT) are currently trading at $15.80 while Cipher Digital (NASDAQ: CIFR) stock is priced at $6.49.