Friday, May 17, 2024
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
AI Adding to Growth. Total revenue for the first quarter was $30.3 million compared to $8.3 million in the prior year. This surpassed our $23.5 million estimate, as a higher bitcoin price and the Company’s inclusion of AI revenue led to the increase. The AI revenue comes from the Company’s anchor AI contract with expected annualized revenue of $50 million. We believe the AI contract provides an alternative revenue stream non-correlated to the cryptocurrency market.
Potential for More Soon. Although the $50 million contract is in place, earlier in the year Bit Digital received a proposal for an expansion of its contract. With the expansion, the proposal calls for an additional 2,048 GPUs on top of the 2,048 GPUs already in the contract, effectively doubling revenue to $100 million. The Company is currently in talks with the client on the terms of the expansion and we expect an announcement in the coming weeks.
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