MARA, RIOT, HUT, GLXY See Price Cuts From Piper Sandler Amid AI Trade Reversal, Hotter Inflation, Pricier Debt

Analyst Patrick Moley maintained ‘Overweight’ ratings on all four stocks despite reducing his price targets.

• Piper Sandler cited rising inflation, higher oil prices, increased borrowing costs and uncertainty about planned AI capital spending as key risks.
• The firm said the four stocks look attractive following their recent selloff.
• Piper’s revised targets still suggest a potential upside of 36% for Riot Platforms, 49% for MARA Holdings, 59% for Galaxy Digital and 80% for Hut 8.

Shares of Riot Platforms (RIOT), Mara Holdings (MARA), Galaxy Digital (GLXY), and Hut 8 (HUT) fell in morning trade on Tuesday after Piper Sandler cut its price targets for all four firms, citing a reversal in the broader AI trade. 

Analyst Patrick Moley cited three pressures in a note to investors cited by TheFly. He said that hotter inflation and higher oil prices, which have revived concerns about further rate hikes. Moreover, credit markets have begun repricing the debt that funds data center build-outs. 

He added that investors continue to debate whether planned AI capital spending will materialize. Piper says the outlook is uncertain, but the stocks look attractive after the selloff.

HUT stock saw the steepest dip at market open, falling as much as 4.8%, followed by RIOT stock, dipped over 4%. GLXY stock tumbled 3.4%. and MARA shares were down around 3%. 

On Stocktwits, retail sentiment around RIOT and GLXY stocks shifted to ‘bearish’ from ‘neutral’ territory over the past day. Sentiment around HUT dipped to ‘neutral’ from the ‘bullish’ zone, while sentiment around MARA continued to trend in ‘bearish’ territory. MARA was also among the top trending tickers on Stocktwits at the time of writing.

Inflation, Oil, Credit Costs Weigh On AI Infrastructure

Last week, September consumer price inflation showed an uptick of 3.7% from a year earlier, above the 3.6% economists had expected, prompting traders to increase bets on another Federal Reserve rate hike. 

Oil prices have also remained above $100 a barrel, adding to concerns about inflation and borrowing costs.

Meanwhile, CoreWeave’s bond yields rose above 15% last week, amplifying investors' concerns over rising cost of financing AI infrastructure. For companies converting existing sites into data centers, higher borrowing costs can make projects less attractive and reduce the value investors assign to those assets.

Piper Joins A Wave Of Analyst Price-Target Cuts

Piper’s reductions follow a series of target cuts across the sector. Morgan Stanley lowered its price targets on MARA, Riot Platforms, Galaxy Digital and Cipher Mining (CIFR)  earlier this month, citing credit-market conditions. However, it raised its targets on Hut 8 to $275 and TeraWulf (WULF) to $65.

Last week, Cantor Fitzgerald also lowered price targets on seven AI infrastructure stocks on Friday, including Riot Platforms to $24 and Hut 8 to $151.

Analyst views remain widely divided. Piper’s $123 target on Hut 8 is less than half Morgan Stanley’s $275 target. For Riot Platforms, Piper’s $19 target compares with Morgan Stanley’s $35.50 target.

The firms also differ when it comes to Mara holdings. Morgan Stanley rates the stock ‘Underweight’ with a $10 price target, while Piper maintains an ‘Overweight’ rating and an $11 target.

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