This Nvidia Partner And Bitcoin Miner Stock Could Surge By 50%, Say Analysts

Frankfurt-based tech company Northern Data NDTAF has seen a significant change in its business model, which has caught the eye of investment bank Berenberg.

What Happened: Northern Data, previously known for its Bitcoin BTC/USD mining operations, has shifted its focus to cloud solutions and data center infrastructure. This transformation has led Berenberg to predict a substantial increase in the company’s stock value, reported CNBC.

The bank has initiated coverage of the company’s stock with a Buy rating and a price target of 39 euros ($41.84) per share, indicating a potential 53.2% upside from the current share price.

The company, listed on the Frankfurt Stock Exchange, operates three main divisions: Peak Mining for bitcoin mining, Taiga Cloud certified as an "Elite" partner of NVIDIA Corp NVDA for cloud computing, and Ardent Data Centers for data center infrastructure. Berenberg believes that the market has largely overlooked the growth potential of Taiga Cloud’s offerings.

"We believe that the significant investments that Northern Data has made in the latest liquid-cooling mining technology and the expansion of the company at its existing North Dakota and new Texas sites should enable it to achieve high bitcoin production and mining profitability," Berenberg analysts Gerhard Orgonas and Jenna Xu said in a note to clients.

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Despite the recent changes, this isn’t the first transformation for Northern Data. The company, formerly known as Biosilu Healthcare, was a pharmaceutical broker for Asian markets until early 2018. It then shifted to crypto mining operations and was renamed Northern Bitcoin, making it one of the earliest listed firms to enter the crypto scene.

With the recent acquisition of a data center in Pittsburgh, Northern Data is expected to continue evolving. The company also stands to benefit from advances made by its subsidiary, Ardent Data Centers, in liquid-cooling technology for its crypto mining operations.

Why It Matters: The shift in Northern Data’s business model comes at a crucial time for the cryptocurrency industry. A recent report by Coinshares predicts a substantial rise in production costs for Bitcoin miners due to the halving, with electricity and overall production costs nearly doubling.

Meanwhile, Bitcoin miners are upgrading their infrastructure and embracing AI to prepare for a potential dip in revenue following the halving. This shift in strategy is reflected in Northern Data’s move towards cloud solutions, which could position the company for significant growth in the coming years.

Furthermore, industry leaders like Block are also working to make Bitcoin mining more accessible, with the development of a complete Bitcoin mining system.

Meanwhile, other major players in the industry, such as Marathon Digital, are also making strategic moves to adapt to the changing landscape. Marathon Digital has raised its 2024 hash rate growth target in response to Bitcoin’s fourth halving event, which reduced miners’ block subsidy rewards from 6.25 BTC to 3.125 BTC.

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