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1. Why did bitcoin miner price targets fall after the Texas vote?
On November 4, Bernstein lowered bitcoin miner price targets on seven publicly traded companies by as much as 54%, one day after Democrats swept the midterm elections and Democrat Gina Hinojosa defeated Texas Governor Greg Abbott. The brokerage cited tighter financing and unresolved questions over Texas data center rules, which could slow the miners' push into artificial intelligence hosting.
The reassessment reaches well beyond mining. Investors on Wall Street are reconsidering how quickly the AI data center build-out can proceed now that political control has shifted in several states. For companies that spent the past two years converting cheap power and large industrial sites into AI facilities, the central question is simple: can they secure the electricity that new data centers require? Miners that already hold approved power connections appear far better placed than those still waiting in line.
Texas sits at the heart of the concern because so much of the planned build-out is located there. The outcome of its governor's race, which Abbott had been heavily favored to win, has therefore become a market-moving event for a niche corner of the equity market.
To understand why the sector is so sensitive, it helps to recall how the business model has shifted. Bitcoin mining has traditionally been a contest over the cost of electricity: the cheaper the power, the better the margin. As AI developers began to hunt for sites with large, reliable grid connections, miners realized that the very assets they had assembled for mining, namely power contracts, land and cooling infrastructure, were in demand for a more lucrative purpose. Securing those connections is slow, and approvals are scarce, which is why any change in the permitting climate can alter valuations so sharply.
2. What changed in Texas?
Hinojosa's victory over the Republican incumbent was an upset. She has said she wants to halt new data center approvals until Texas establishes rules that protect residents from higher electricity bills and rising water costs. That position directly challenges the permissive environment in which developers have been planning projects.
The size of the state's share of planned capacity explains the attention. Goldman Sachs estimates that states likely to tighten data center rules account for about 45% of planned U.S. capacity, with Texas alone representing roughly a quarter. SemiAnalysis puts Texas closer to 30% of the capacity expected to come online in 2028, drawing on Bloomberg figures compiled by analyst Neil Sethi.
Those numbers translate into billions of dollars of projects that now face a greater risk of delay. Markets reacted quickly, though not for long. Technology stocks fell as results arrived, and Nasdaq-100 futures dropped about 1.5% overnight before recovering on Wednesday morning.
3. Will Texas actually stop building data centers?
Analysts do not expect a construction standstill. The more realistic risks, in their view, are longer approval timelines and higher costs to build. Libby Cantrill of PIMCO anticipates "a lot more sand in the gears" even if no statewide ban emerges, according to Sethi's compilation of analyst reactions.
Goldman Sachs economists take a similar view about duration. They expect Democrats in Texas, Georgia and Michigan to impose temporary pauses on new data centers while lawmakers consider rules covering electricity, water and tax breaks. They do not expect those restrictions to last long, because data centers are not a leading priority for voters.
The distinction matters for investors. A short pause that adds months to a schedule is a very different problem from a lasting ban, yet even modest delays can raise financing costs and push back the revenue that lenders and shareholders are counting on.
For investors who follow the sector, the episode is a reminder that policy risk is not confined to crypto rules. Political decisions about land use, electricity pricing and water consumption now influence the fortunes of companies that began as bitcoin miners. Voters in many places have grown wary of data centers because of fears that their power demand could push household bills higher, and candidates have responded. A governor who campaigns on consumer protection can change the pace of an entire industry through permits alone.
4. Why are miners so exposed to the Texas outcome?
Over the past two years, bitcoin miners have tried to turn inexpensive power and sprawling industrial sites into businesses that host computing for AI customers. Texas has been central to those plans. Gautam Chhugani, a senior analyst at Bernstein, says more than half of the power capacity held or planned by the miners-turned-AI developers his firm covers is in the state.
Before the election, investors had expected Abbott to loosen restrictions after voting concluded, provided developers met certain conditions. Hinojosa's win overturned that assumption. In his research note, Chhugani wrote that he expects the data center pause to continue and any related legislation to remain in gridlock.
That view helps explain why the brokerage moved without waiting for new rules to take shape. For companies whose growth story depends on turning planned megawatts into signed contracts, an extended period of legislative stalemate is difficult to price.
The distinction between secured and unsecured power is likely to define the next phase of the sector. A miner with an energized site and a signed hosting agreement can start generating revenue regardless of what lawmakers decide next. A miner whose capacity exists only on paper, pending approval, carries the full burden of the uncertainty. Analysts therefore treat the pipeline of approved megawatts as a more valuable asset today than it was last week.
5. How deep are Bernstein's cuts?
Bernstein now values the AI colocation business of these companies at 12 times enterprise value to forward-year EBITDA, applied to its 2030 estimates. In plain terms, the firm assigns a lower value to the earnings the miners expect to generate by renting data center space and power to AI customers, reflecting tighter financing conditions and the uncertainty in Texas.
The revised targets are as follows: Cipher Mining falls to $15 from $23, IREN to $55 from $100, TeraWulf to $20 from $36, and Core Scientific to $19 from $32. Riot Platforms drops to $18 from $35, MARA Holdings to $10 from $17, and CleanSpark to $11 from $24.
Across the seven companies, the reductions range from about 35% to 54%. IREN's cut, from $100 to $55, is the steepest at 45%, while the reduction for Riot, from $35 to $18, is close to 49%. Such large revisions in a single note show how much of these valuations rests on future AI hosting income rather than on bitcoin mining itself.
6. Which miners could still benefit?
Not every Texas-exposed miner is at risk. Chhugani says companies with secured power could gain if new limits make grid access harder for competitors. IREN, Riot and Cipher Mining have the most Texas exposure among the companies Bernstein follows, yet all three also hold approved capacity measured in gigawatts, which he says "may be considered scarce and valuable."
Morgan Stanley draws a comparable line between projects already underway and those still awaiting approval. In a Wednesday note led by Stephen Byrd, the bank flagged Cipher Mining, MARA Holdings and Galaxy Digital as facing greater uncertainty in Texas, and said it will re-examine prospects for Cipher's Colchis site, Galaxy's Helios II project and MARA's expansion plans.
The bank sees TeraWulf, Hut 8 and Applied Digital as better positioned if power supplies tighten. TeraWulf has little exposure to changes in Texas rules, and Hut 8 could gain if developers move projects to Louisiana. Riot is harder to classify: its existing grid connections at Corsicana and Rockdale could become more valuable, but planned expansion at those sites might run into obstacles.
7. Is the slowdown necessarily bad for the AI trade?
Not everyone reads slower construction as a negative. Rich Privorotsky, a strategist at Goldman Sachs, notes that AI-related stocks were heavily sold ahead of the election. He thinks some companies could pull spending forward into 2027 so that they can begin projects before any new rules take effect.
There is also an argument that scarcity supports the value of what already exists. If fewer new data centers are built, facilities that are already operating could become more valuable to the customers that need computing capacity.
Pershing Square's November 2 shareholder letter makes the case for continued AI investment. It points out that Microsoft, Meta, Amazon and Google are expected to spend about $740 billion on capital projects this year, up from roughly $140 billion in 2023, and that the total could exceed $1 trillion in 2027.
8. What comes next for bitcoin miners?
For miners, the question is how much of that enormous spending they can capture. Companies with operating sites, approved power and signed AI hosting contracts hold a clear advantage. Those that depend on future grid connections could face years of delay if Texas lawmakers add conditions or pauses.
No specific legislative calendar was given, so the next signals are likely to come from state officials' first moves on data center approvals, from further research notes by brokerages such as Bernstein and Morgan Stanley, and from company updates on the status of their power agreements. Morgan Stanley has already said it will revisit several individual projects.
For now, the market is sorting miners into two groups: those whose power is already secured and those whose growth plans still depend on approvals that have become harder to predict. How that gap evolves will shape both the valuations of the sector and the pace at which bitcoin miners convert their sites into AI infrastructure.