KBW is taking a extra cautious stance in direction of the crypto mining sector. Wall Road funding banks embrace BitFarms (BITF), BitDeer (BTDR), hive Digital (hive) From outperformance to market efficiency.
In a collection of notes to buyers issued on Monday, the financial institution instructed that whereas the trade's pivot to high-performance computing (HPC) and AI internet hosting is engaging, the trail to profitability comes with execution dangers and lengthy lead occasions.
Dealing with a record-low margin atmosphere after the 2024 halving, Bitcoin miners are rebranding as digital infrastructure suppliers to seize a chunk of the AI gold rush. By changing Warmshell, already a facility with high-density energy and cooling, into an AI-enabled knowledge heart, these firms hope to commerce risky mining rewards for steady long-term company contracts.
Nonetheless, this transition just isn’t a easy diversion. HPC's large capital necessities and strict uptime requirements create a high-stakes divide between those that can efficiently full a retrofit and people who stay left with stranded property.
Bitfarms: Sharon's lengthy wait time
Analyst Stephen Glagola downgraded BitFarms' market efficiency, noting that whereas CEO Ben Gagnon has a stable imaginative and prescient, the market has already priced within the potential of a 120-megawatt (MW) web site in Sharon, Pennsylvania.
Regardless of elevating BitFarms' worth goal to $3.00 from $2.50, the analyst doesn't anticipate a proper lease settlement to happen till the second half of 2026. He additionally expressed skepticism about BitFarms' potential for AI cloud entry in Washington, highlighting issues about rising leverage.
The inventory worth was unchanged in early buying and selling.
Bitdeer: scale and uncertainty
Bitdeer's downgrade was accompanied by a big discount in its worth goal, dropping from $26.50 to $14. Whereas KBW acknowledged that Bitdeer is on observe to develop into a serious public miner by 2026 by way of its vertically built-in Sealminer know-how, it cautioned that the corporate's rising concentrate on AI cloud additional heightens uncertainty.
The analyst cited the enterprise' present small dimension, concentrated shareholder management and “associated get together publicity” as key causes for shifting to the sidelines.
The inventory worth rose barely to $13.91.
hive: Lack of “sturdy edges”
hive Digital lowered its worth goal from $11.00 to $3.50 as Glagora questioned the sustainability of its AI cloud technique. Analysts identified that: hiveis in a “suboptimal place” in comparison with its pure knowledge heart opponents resulting from its reliance on accomplice channels and capital funding.
Moreover, KBW was flagged hive's pre-tax ROIC is damaging, suggesting that the corporate is increasing its mining hashrate with out producing enough working revenue in an atmosphere of suppressed hash costs.
hive On the time of publication, the inventory was up 0.3% at $3.04.
Throughout all three names, the funding financial institution's message was constant. The transition from miner to knowledge heart operator is a capital-intensive journey that will require extra dilution and endurance than buyers at the moment anticipate.
learn extra: Decrease hashrate and better profitability will increase Bitcoin miners in early 2026: JP Morgan
