Benchmark sees even more upside in Bitdeer's stock after share price quadruples

Bitdeer Technologies, a bitcoin mining and data company, has seen its share price almost quadruple over the past four months, including an increase of nearly 170% in the past month alone. Last Friday, it jumped more than 23% after releasing its monthly production and operations  update for November, which highlighted the progress made in its efforts to develop next-generation ASIC chips and bitcoin mining rigs.

The rally in Bitdeer's stock (ticker: BTDR) has gained strength due to potential upside from three different drivers, according to Benchmark senior equity analyst Mark Palmer: its development and operation of data centers powering artificial intelligence and high-powered computing (HPC) projects, its addition of hashrate in support of its bitcoin self-mining efforts and its design and manufacture of next-generation ASIC chips and bitcoin mining rigs.

"Especially noteworthy was BTDR’s announcement that it had boosted its expectations for the hashrate its SEALMINER A2 mining rigs would generate in 2025 to ~35 EH/s from 18 EH/s based on the wafer capacity it has been able to secure," Palmer wrote Monday in a note to clients. "The company added that an initial allocation of ~30k SEALMINER A2 units for external sale (representing ~7 EH/s of the 35 EH/s) had been fully reserved by customers."

Management said the SEALMINER A4 unit is key to positioning Bitdeer to take market share from Bitmain and MicroBT, "the clear leaders in a bitcoin mining rig market estimated to represent $4bn to $5bn of annual sales over the next five years," Palmer said.

The analysts noted that Bitdeer is also set to boost its bitcoin self-mining efforts by integrating a portion of the rigs it produces into its own mining fleet, "making it the most vertically integrated firm among the listed bitcoin miners."

Benchmark reiterated its "buy" rating on BTDR while raising the price target from $16 to $29.

Bitdeer's stock traded at $21.10 at publication time, according to Yahoo Finance. Shares had been trading between the $5.30 and $12.40 area for most of 2024 before surging amid the Nov. 5 presidential election. The company's market cap sits at around $3 billion.

"We continue to view the stock, which trades at 5.4x our FY25 revenue estimate, as attractive given the extent to which the company’s multifaceted business model provides investors with multiple ways to realize upside," Palmer said.