Bitcoin miners that turned into AI landlords have been valued on how many megawatts of power they control and how much of it sits in Texas, where power has been easiest to get. On Tuesday, Texas elected Gina Hinojosa governor after she promised to keep data center approvals on hold until the legislature writes new rules.
On Wednesday, Bernstein cut its price targets on seven of these miners by 35% to 54%, citing “tighter financing markets and overall Texas uncertainty.”
But megawatts in Texas alone do not tell an investor which projects a Texas pause affects. A freeze would work on approvals not yet granted: a grid classification, an environmental permit, a tenant still to be signed.
Some miners have cleared every gate for the capacity they have leased. Some have leased capacity that still waits on a state permit. Others are waiting on the grid operator for most of what they plan to build.
This issue sorts Riot Platforms (RIOT), Galaxy (GLXY), Core Scientific (CORZ), Cipher Digital (CIFR), IREN (IREN), Hut 8 (HUT), MARA Holdings (MARA), CleanSpark (CLSK) and TeraWulf (WULF) into those groups. It also points to the dates when their position could change.
Texas Already Had a Freeze. The Election Could Change How Long It Lasts
Gov. Greg Abbott put new data center approvals on hold himself, months before the vote. In August he ordered state utility regulator Public Utility Commission of Texas (PUCT) and grid operator Electric Reliability Council of Texas (ERCOT) to audit “all data centers advancing through ERCOT’s interconnection process before any additional data centers are approved to move forward.”
On Sept. 21 he told state environmental regulator Texas Commission on Environmental Quality (TCEQ) to halt permits for data centers until the audit is done. “Until they do, TCEQ will issue no permits sought by data center projects,” Abbott said at the time. ERCOT’s audit report is due around Dec. 10.
The data center approval pause now looks set to extend beyond that deadline, judging by Governor-elect Hinojosa’s public remarks and campaign priorities, which suggests she wants a pause in place until the legislature passes laws.
Hinojosa takes office Jan. 19, a week after lawmakers convene for a legislative session that runs to May 31.
Democrats won the Texas House, but Republicans kept a 19-12 majority in the state Senate. Bernstein analyst Gautam Chhugani reportedly wrote that “We would expect the data center pause to continue and any data center potential legislation to remain in gridlock.”
Democrats also won Congress, but that matters less here: the Federal Energy Regulatory Commission does not regulate power lines running entirely within ERCOT’s grid.
The Analyst Cuts Treated Every Miner the Same
Bernstein revised its forecast for miners downward now anticipating delayed approvals. Chhugani named IREN, Riot and Cipher as the most exposed to Texas, but said their approved gigawatt-scale power “may be considered scarce and valuable” if new rules make it harder for others to connect.
The targets fell together because Bernstein lowered one valuation multiple across the whole group.
By our count from those targets, Riot’s fell 49% and TeraWulf’s 44%, close to IREN’s 45%. Yet TeraWulf sold its only Texas asset, a joint-venture stake, this quarter and Riot’s leased capacity sits on grid connections approved years ago.
The stocks drew a rougher version of the same line the day after the vote. On Nov. 4, Cipher fell 20% while the Nasdaq-100 rose about 1%, by our count from closing prices. CleanSpark and Galaxy, with large Texas pipelines still waiting, fell about 17%. TeraWulf and Applied Digital, with little Texas exposure, and MARA, still mostly a bitcoin miner, fell less than 7%. Riot rose 10% on its lease news, and Hut 8 fell 23% on its own results.
All of these stocks had jumped at least 10% on Election Day itself, and on Nov. 5 the whole AI trade sold off together.
In the rest of the issue, subscribers get:
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- What Hinojosa says she wants, what she can and cannot do on her own, including whether approved projects can be stopped
- A company-by-company sort of which miners are leased on approved power, which still wait on a state permit, and which wait on the grid operator
- The two risks that reach even approved campuses: environmental permits that most of these companies do not disclose, and the delivery clocks in their leases
- How fair Bernstein’s cuts are to the miners with approved power, and to those still waiting
- Bull, base and bear cases for AI-pivoted miners through the end of the legislative session, with the signals that would change the call
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