KBW is taking a extra cautious stance on the crypto mining sector. The Wall Avenue funding financial institution downgraded Bitfarms (BITF), Bitdeer (BTDR), and HIVE Digital (HIVE) from outperform to market carry out.
In a collection of notes to traders revealed Monday, the financial institution signaled that whereas the trade’s pivot towards high-performance computing (HPC) and AI internet hosting is compelling, the trail to monetization is fraught with execution dangers and lengthy lead occasions.
Confronted with a record-low margin setting following the 2024 halving, bitcoin miners are rebranding as digital infrastructure suppliers to seize a slice of the AI gold rush. By changing heat shells, services already outfitted with high-density energy and cooling, into AI-ready knowledge facilities, these companies hope to commerce risky mining rewards for secure, long-term enterprise contracts.
Nonetheless, the transition is not any easy pivot; the huge capital necessities and rigorous uptime requirements of HPC are forcing a high-stakes divide between those that can efficiently retrofit and people left holding stranded belongings.
Bitfarms: The lengthy look forward to Sharon
Analyst Stephen Glagola downgraded Bitfarms to market carry out, noting that whereas CEO Ben Gagnon has a strong imaginative and prescient, the market has already priced within the potential of its 120-megawatt (MW) Sharon, Pennsylvania, web site.
Regardless of elevating Bitfarms’ worth goal to $3.00 from $2.50, the analyst doesn’t count on a proper leasing settlement to materialize till the second half of 2026. Moreover, he expressed skepticism relating to Bitfarms’ potential AI cloud entry in Washington and highlighted considerations over rising leverage.
The shares have been unchanged in early buying and selling.
Bitdeer: scale vs. uncertainty
Bitdeer’s downgrade was accompanied by a major worth goal reduce, falling to $14 from $26.50. Whereas KBW acknowledged Bitdeer is on monitor to change into a number one public miner by 2026 by means of its vertically built-in Sealminer know-how, it warned that the corporate’s rising give attention to AI cloud provides layers of uncertainty.
The analyst cited the enterprise’s present small scale, concentrated shareholder management, and “related-party publicity” as key causes to maneuver to the sidelines.
The inventory was modestly larger at $13.91.
HIVE: Missing a “sturdy edge”
HIVE Digital noticed its worth goal slashed to $3.50 from $11.00 as Glagola questioned the sturdiness of its AI cloud technique. The analyst famous that HIVE’s reliance on associate channels and tools financing leaves it “sub-optimally positioned” in comparison with pure-play knowledge heart opponents.
Moreover, KBW flagged HIVE’s adverse pre-tax ROIC, suggesting the corporate is scaling its mining hashrate with out producing adequate working returns in a suppressed hashprice setting.
HIVE was 0.3% larger at $3.04 at publication time.
Throughout all three names, the funding financial institution’s message was uniform: the transition from miner to knowledge heart operator is a capital-intensive journey that will require extra dilution and endurance than traders at the moment anticipate.
Learn extra: Early 2026 tailwinds for bitcoin miners as hashrate falls, profitability improves: JPMorgan
