Wall Street's Attractive AI and Data Center Deals Keep Booming Despite Market Doubts

Power remains the most fundamental constraint in the artificial intelligence and cryptocurrency sectors, creating a steady stream of lucrative dealmaking opportunities throughout 2025 and into early 2026. While headlines have focused on cooling valuations and profit-taking in AI stocks, the underlying demand for data center capacity tells a different story—one of sustained growth and increasingly attractive returns for infrastructure investors.

According to Joe Nardini, head of investment banking at B. Riley Securities, the market for megawatt capacity remains “huge,” with demand from bitcoin miners, AI firms, and high-performance computing (HPC) developers continuing to push valuations higher. “M&A work is still ongoing as people still need power,” Nardini stated in recent discussions, emphasizing that the problem isn’t a shortage of deals, but rather a shortage of available capacity.

The dynamic has become increasingly attractive to a diverse buyer base. Where once cryptocurrency miners dominated the demand side, the landscape now includes hyperscalers like Amazon and Microsoft, specialized AI infrastructure firms, and traditional industrial companies seeking to monetize existing facilities. This expansion has created what Nardini describes as a “strategic fork”—asset owners must decide whether to sell to these buyers or attempt to become developers themselves.

Why Data Center Valuations Remain Attractive to Multiple Buyers

The pricing landscape reveals the depth of demand. In competitive situations with high-quality power and strategic locations, Nardini has observed valuations reaching as high as $400,000 to $450,000 per megawatt, with some prior transactions priced at $500,000 to $550,000 per megawatt. These premium valuations reflect the scarcity of truly desirable capacity—locations with reliable power, reasonable operating costs, and room for expansion.

Even distressed assets command interest, though at lower valuations. Less optimal sites or facilities in weaker markets still attract “lowball” bids ranging from $100,000 to $250,000 per megawatt from buyers who value the power availability above all else. This dual-track pricing demonstrates the strength of underlying demand—even suboptimal assets find willing acquirers.

A concrete example underscores this appetite: one private asset attracted interest from roughly 25 prospective buyers seeking confidentiality agreements, including bitcoin miners, hyperscalers, and AI firms. In another case, a tenant was willing to prepay rent before facility completion, a striking illustration of how scarce desirable capacity has become.

The Hut 8 deal with Fluidstack epitomizes the attractive AI infrastructure opportunity. The publicly-traded bitcoin miner signed a 15-year, $7 billion lease for 245 megawatts of IT capacity at its River Bend campus, sending shares surging 20% in a week. Despite broader market weakness in AI stocks like Nvidia and infrastructure plays like CoreWeave, such announcements confirm that core economics remain intact for companies with genuine capacity and creditworthy tenants.

The Real Driver Behind AI Infrastructure Demand

Bitcoin miners have played a crucial role in adapting to market conditions. After the 2024 halving compressed mining profitability, the industry pivoted toward hosting AI and HPC hardware in existing data centers. This transition proved attractive not just operationally but financially—mining companies that successfully repositioned have seen valuations expand and gained access to cheaper capital on more favorable terms.

This diversification explains why Nardini remains constructive on the space despite setbacks in AI sentiment. When he asks executives the fundamental questions—Do you have demand for your capacity? Do you have good tenants? Are they paying strong rates?—the answers remain consistently affirmative. The message from the market is unambiguous: demand persists, pricing holds firm, and capacity constraints remain acute.

Industrial companies with aging or underutilized facilities have recognized the opportunity. One client is repurposing vacant office buildings into modular power capacity, building 30-megawatt units in succession and now seeking additional funding to scale further. These conversions, even involving 160-year-old facilities, succeed because the primary attraction—reliable power—overcomes locational disadvantages.

Market Outlook: Why Investors Stay Bullish on Power and Computing Capacity

Looking toward 2026, Nardini maintains a constructive outlook conditioned on macroeconomic factors. Should interest rates decline, the environment could prove “risk-on,” further supporting dealmaking activity in data center infrastructure. His conviction stems not from optimism about AI hype, but from operational reality: developers with attractive capacity have demand from multiple creditworthy tenants at strong rates.

The single condition that would prompt concern is simple: if developers cannot lease what they build or fail to achieve pricing targets. For now, that scenario remains absent from market conversations. Hyperscalers, AI firms, and mining companies continue to compete aggressively for limited capacity, bidding up valuations for quality assets while maintaining steady interest even in secondary markets.

“The demand for power and AI HPC data center capacity continues unabated,” Nardini concluded. “Developers with data center capacity have demand from multiple creditworthy tenants at good rates, so the core economics of business remain intact.” With pricing holding strong and visibility into 2026 demand clearly supportive, the conditions remain attractive for both buyers seeking capacity and sellers seeking premium valuations.

The AI trade, far from dead, continues to drive one of Wall Street’s most consistent dealmaking narratives—powered by the fundamental reality that computing infrastructure requires megawatts of electricity, and supply constraints ensure that attractive opportunities will persist for infrastructure investors willing to provide it.