KBW is taking a extra cautious stance in the direction of the crypto mining sector. Wall Avenue funding banks embody BitFarms (BITF), BitDeer (BTDR), $HIVE Digital ($HIVE) From outperformance to market efficiency.
In a collection of notes to traders issued on Monday, the financial institution steered that whereas the business’s pivot to high-performance computing (HPC) and AI internet hosting is enticing, the trail to profitability comes with execution dangers and lengthy lead occasions.
Going through 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 information heart, these firms hope to commerce risky mining rewards for steady long-term company contracts.
Nevertheless, this transition shouldn’t be 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 would not count on 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 major discount in its worth goal, dropping from $26.50 to $14. Whereas KBW acknowledged that Bitdeer is on observe to turn into a significant public miner by 2026 by way of its vertically built-in Sealminer know-how, it cautioned that the corporate’s rising deal with AI cloud additional heightens uncertainty.
The analyst cited the enterprise’ present small measurement, concentrated shareholder management and “associated get together publicity” as key causes for transferring 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 information heart opponents on account of its reliance on accomplice channels and capital funding.
Moreover, KBW was flagged $HIVE‘s pre-tax ROIC is destructive, suggesting that the corporate is increasing its mining hashrate with out producing ample 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 information heart operator is a capital-intensive journey which will require extra dilution and endurance than traders at the moment count on.
learn extra: Decrease hashrate and better profitability will enhance Bitcoin miners in early 2026: JP Morgan
