HPC is the Backbone of the Market: AI/Bitcoin Data Center Transactions Continue to Explode on Wall Street

When market sentiment begins to waver against the artificial intelligence bubble, there is one sector that remains steadfast: high-performance computing (HPC) data center trading. This confidence is not just mere optimism—according to Joe Nardini, head of investment banking at B. Riley Securities, the fundamental demand for power infrastructure remains very strong, even until the end of last year. Bitcoin miners and GPU-based data center developers continue to negotiate aggressively for megawatt capacity, while the valuation of these assets keeps rising.

What is HPC is an increasingly relevant question among investors. High Performance Computing, or HPC, refers to advanced computing infrastructure capable of processing massive amounts of data at high speeds. HPC is the backbone for AI development, blockchain mining, and other enterprise-scale applications. In the current market context, the need for electrical capacity to support HPC continues to grow drastically, driving a wave of transactions in the energy infrastructure real estate market.

Power Demand: The Most Honest Market Signal

" M&A activity is still ongoing because people still need electricity," Nardini revealed in his exclusive discussion. Although worrying news about the AI bubble has hit the tech market, fundamental business logic suggests otherwise. Nardini uses a “four simple questions” approach to gauge market health:

1. Do clients have demand for the data center capacity they have built?
2. Do they have tenants?
3. Are those tenants of good quality with strong creditworthiness?
4. Are they getting competitive and profitable rates?

Consistent answers from all his conversations: “Yes, yes, and yes.” Power demand from Bitcoin miners remains “large,” while the push from AI and HPC is even “bigger,” with data center operators reporting continued demand for GPU-equipped facilities.

Previous Bitcoin halving events cut miners’ rewards in half, creating significant margin pressure. However, industry responses reflect smart adaptation: more miners are shifting to provide AI hardware and HPC capacity within their existing data centers. This diversification strategy has helped drive sharp increases in the valuations of several Bitcoin mining stocks this year, amid the AI enthusiasm spreading in the equity markets.

Spectacular Transactions: When Price per Megawatt Reaches New Levels

The strongest signal of market vitality comes from ongoing real transactions. Hut 8, a leading data center operator, recently signed a 15-year lease valued at $7 billion with Fluidstack for 245 megawatts of IT capacity at its River Bend campus. This announcement alone caused the company’s stock to jump up to 20% in a short time—clear evidence that the market highly rewards quality power infrastructure owners.

Nardini shared interesting details about the valuations being negotiated. In a competitive situation with premium quality power and strategic locations, the “dollar per megawatt” financial metric—measuring the economic value of each megawatt of electrical capacity—has reached astonishing levels. One ongoing transaction shows valuations exceeding $400,000 per megawatt, with potential to reach $450,000 per megawatt depending on final negotiations. In some cases, Nardini has even seen deals valued as high as $500,000 to $550,000 per megawatt—levels previously considered impossible.

Of course, not all assets enjoy premium valuations. Facilities in problematic locations or with less desirable power quality still attract interest, but at significant discounts: around $100,000 to $250,000 per megawatt. Buyers in this category favor power aspects but are willing to accept discounts to compensate for suboptimal location or market quality.

Buyer and Seller Ecosystem: Evolving Market Dynamics

Who exactly is transacting in this market? According to Nardini, buyers include hyperscalers—giant cloud computing infrastructure providers—pure AI companies, and Bitcoin miners. This buyer composition reflects a massive digital transformation in the computing sector.

On the other side, sellers are becoming more diverse. No longer limited to native crypto players, the seller category now includes owners of old industrial facilities decades old, even 160-year-old facilities relying on electricity as their main asset to attract new investors. Nardini notes cases where a private seller of similar assets attracted about 25 potential buyers seeking NDA— including Bitcoin miners, hyperscalers, and AI companies. This demand intensity creates leverage that favors sellers in negotiations.

This phenomenon opens unique strategic branching for owners of older assets. They can choose to sell to hyperscalers or AI developers, or attempt to transform into data center developers themselves. Nardini sees industrial companies with older, inactive, or nearly inactive facilities with surplus power starting to consider selling to the AI/HPC and Bitcoin ecosystems.

In one inspiring case, Nardini’s private client converted an old office block into modular power capacity, “building a 30-megawatt unit at once,” and is now seeking additional funding for aggressive expansion. In at least one negotiation, a tenant even agreed to pay rent upfront before closing the deal— a dramatic illustration of how scarce and valuable quality power capacity is today.

Outlook 2026: Risk-On Environment and Further Opportunities

Looking toward 2026, Nardini remains optimistic about the conditions supporting risk assets, especially if interest rates decline to lower levels. The “risk-on environment” scenario—where investors are willing to take more risks for higher potential returns—will be a positive catalyst for transactions in the power infrastructure industry.

Nardini admits that he might be “slightly promoting his own interests” with this optimism. However, the operational realities he hears directly from mining and data center executives keep him confident: tenants are there, prices remain strong, and if one customer doesn’t take a particular location, “others will take it enthusiastically.”

The only scenario that would change Nardini’s outlook is if data center developers fail to lease what they build, or cannot secure the rates needed for long-term sustainability. Currently, he says he has not heard any such warning signals from the field. “Business fundamentals remain intact,” he asserts firmly.

In conclusion, demand for high-performance data center capacity and AI/HPC continues unabated. Developers with data center capacity serve a diverse array of credible tenants at good rates, ensuring core business economics stay healthy. Buyers still highly desire energy, while sellers see valuations remain favorable for their assets. This combination reinforces Nardini’s thesis on market vitality. “AI and HPC trading is still alive,” he says, ending the discussion with genuine investor confidence.