Power Demand Remains Unabated: Inside Wall Street's Booming Data Center M&A Market

Despite whispers about an artificial intelligence bubble, dealmaking activity across Wall Street reveals a starkly different reality: power remains king. Bitcoin miners and data center operators continue bidding intensely for electrical capacity and facility assets, signaling that the fundamental infrastructure challenge—not market sentiment—is driving valuations and M&A activity through 2025 and into early 2026.

According to Joe Nardini, head of investment banking at B. Riley Securities, the demand for power “is still there” across multiple market conversations he’s monitoring. “M&A work continues because people need electricity,” Nardini noted in recent interviews, citing real-world evidence from transaction activity into December.

Unabated Appetite for GPU Capacity and Megawatts

The narrative around AI’s demise intensified when major tech stocks including Nvidia corrected sharply, and specialized AI infrastructure players like CoreWeave (CRWV) retreated over 50% from summer peaks. Yet beneath this market turbulence, a different pattern emerges from actual business operations.

Bitcoin miners—facing margin compression after the halving cut block rewards in half—increasingly host AI and high-performance computing (HPC) workloads on existing infrastructure. This pivot proved strategically brilliant as valuations compressed and capital markets reassessed. Companies that shifted toward GPU-ready operations gained access to cheaper funding and attracted higher valuation multiples compared to pure-play mining peers.

The evidence is tangible. GPU-heavy data center capacity continues commanding premium rates from multiple creditworthy tenants. Hut 8, for instance, rallied 20% recently after securing a 15-year, $7 billion lease agreement with Fluidstack for 245 megawatts of IT capacity at its River Bend facility—demonstrating that demand for quality capacity remains unabated and commands premium economics.

“Despite the selloff, these companies are well-rewarded with higher multiples and the ability to raise capital at attractive terms,” Nardini explained. The recurring theme across dealmaking conversations: yes to tenant demand, yes to creditworthy counterparties, yes to strong pricing.

The Strategic Pivot: Why Miners Are Becoming Data Center Operators

The transformation extends beyond opportunistic positioning. Industrial asset owners—traditional manufacturing operators, real estate holders, and infrastructure companies—increasingly view power-rich properties through an AI and HPC lens. The shift creates a novel strategic fork: remain a passive landlord or actively develop data center capacity for hyperscalers and AI firms.

Nardini documented several illustrative transactions. In one case, a private seller of industrial real estate attracted roughly 25 prospective bidders—a mix of bitcoin miners, hyperscalers, and AI developers—all seeking NDA protection to evaluate the asset. The underlying appeal: abundant, uninterrupted power supply.

Another example involved an older, 160-year-old industrial facility where the primary valuation driver was electricity infrastructure. A separate transaction featured a private client converting vacant office buildings into modular power capacity, building 30-megawatt units incrementally while seeking capital for expansion. Notably, one prospective tenant even offered to prepay rental obligations before facility completion—a striking indicator of how scarce premium capacity truly is.

Valuation Dynamics in Competitive Markets

Transaction pricing diverges sharply based on location, power quality, and market conditions. In competitive situations with high-quality power and attractive markets, dollar-per-megawatt valuations reach “very attractive” levels, according to Nardini’s observation. He documented one process valuing capacity at over $400,000 per megawatt, with potential to reach $450,000 depending on negotiation outcomes. Prior transactions have reached $500,000 to $550,000 per megawatt in premium scenarios.

By contrast, distressed or geographically undesirable properties attract lower valuations, sometimes ranging from $100,000 to $250,000 per megawatt from buyers drawn to the power infrastructure but discounting location and market dynamics. This 5-to-10x differential highlights how critical location, facility quality, and market position remain—even when power availability is consistent.

The buyer universe continues broadening. Hyperscalers (large cloud computing platforms), specialized AI firms, and bitcoin mining operators remain primary acquirers. Yet sellers increasingly span beyond crypto-native players. Traditional industrial companies, private real estate holders, and infrastructure specialists now participate, recognizing the premium economics attached to power-rich assets.

Beyond Crypto: Industrial Assets Enter the AI Infrastructure Boom

What’s particularly striking is the transformation of peripheral industrial assets into premium infrastructure plays. Vacant factories, aging office complexes, and underutilized industrial campuses suddenly possess competitive advantages if power infrastructure aligns with capacity requirements. The AI and HPC boom has essentially created new demand for assets previously deemed marginal or non-core by traditional metrics.

This dynamic is attracting capital from unexpected sources. Industrial real estate firms, family offices, and regional developers now evaluate portfolio assets through a power-and-capacity framework rather than traditional commercial real estate metrics. A 160-year-old warehouse, previously valued as storage or light manufacturing, suddenly represents a potential 50-200 megawatt data center opportunity.

Risk Assets and Market Outlook for 2026

Looking forward to 2026, Nardini characterizes the current setup as potentially favorable for risk assets if interest rates decline—creating what he describes as a “risk-on environment.” This scenario would support continued M&A momentum within data center and power infrastructure sectors.

His positive assessment carries an important caveat: developers must lease deployed capacity at competitive pricing. Should the market face a scenario where new capacity sits idle or fails to achieve required rental rates, that inflection point would signal fundamental demand destruction. For now, across multiple conversations spanning operators and developers, Nardini is hearing consistent affirmation: “The bones of the business remain intact.”

Current BTC trading near $78,820 (as of early February 2026) reflects steady market conditions, though sentiment around AI infrastructure continues oscillating. Nevertheless, transaction activity and tenant commitment suggest underlying economics transcend short-term sentiment.

The Unabated Demand Reality

“The demand for power and AI HPC data center capacity continues unabated,” Nardini concluded. “Developers with quality capacity report demand from multiple creditworthy tenants at strong rates. Core economics remain intact.”

His final assessment: buyers remain hungry for reliable power infrastructure, sellers continue accessing attractive valuations, and transaction flow shows no signs of deceleration. As of early 2026, the fundamental infrastructure trade—not sentiment about AI or crypto—continues anchoring dealmaking activity. The “AI trade” remains decidedly alive, underpinned by a prosaic but essential reality: electricity and computing capacity are perpetually in demand.