AI trade isn’t dead: An inside look into Wall Street's lucrative data center deals

Core Insights - The artificial intelligence (AI) bubble is under scrutiny, yet Wall Street dealmaking persists due to the ongoing demand for power from bitcoin miners and data center developers [1] - Demand for power from bitcoin miners is substantial, but the demand from AI and high-performance computing (HPC) is even greater, with clients reporting a need for GPU-ready facilities [2] Industry Dynamics - Following the bitcoin halving, miners experienced a margin squeeze, prompting a shift towards hosting AI and HPC hardware in their data centers, which has positively impacted BTC mining stocks amid AI market hype [3] - Concerns about AI valuations have led to significant market value losses for major tech companies, including Nvidia and CoreWeave, with CoreWeave's stock down over 50% from its peak [4] Demand and Valuation - Despite market fluctuations, demand for data center capacity remains strong, with companies confirming they have tenants and are receiving favorable rates [5] - Companies have benefited from higher valuation multiples and favorable capital-raising conditions despite recent selloffs [6] M&A Activity - The ongoing demand for power is driving M&A negotiations, with attractive financial metrics for power in competitive locations [7] - Valuations for power can reach over $400,000 per megawatt, with potential peaks of $450,000 per megawatt, and previous deals have been priced as high as $500,000 to $550,000 per megawatt [8]