This analyst loves Bitfarms

ATB Capital Markets analyst Martin Toner raised his target on Bitfarms (Bitfarms Stock Quote, Chart, News, Analysts, Financials TSX:BITF) to C$8.50, from C$7.00, while maintaining an “Outperform” rating following the company’s Nov. 13 quarterly update.

Toner said the stock should not have traded lower after the results, arguing that the market underappreciated Bitfarms’ progress in reshaping itself from a Bitcoin miner into a high-performance computing and AI-infrastructure platform.

Bitfarms is a digital infrastructure company with data-centre operations across the United States, Canada, and Paraguay. While historically known for Bitcoin mining, the company has been moving quickly to convert its low-cost power assets into facilities designed for high-density GPU workloads.

Toner said Bitfarms is now “entering the GPUaaS debate,” as the company weighs whether to operate GPUs directly at certain sites rather than simply leasing power and space to clients. The strategy reflects management’s view that the real bottleneck in the AI infrastructure market is power and location, not chips or capital. Lease rates, Toner noted, have climbed sharply this year, and Bitfarms is deliberately holding off on committing large sites so it can secure even better pricing once its facilities come online.

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Revenue for the third quarter was $69.2-million, up 54% year-over-year but below consensus expectations of $88.1-million. Mining gross profit of $21.1-million lagged forecasts as Bitfarms wound down cryptocurrency production faster than expected, exiting Q3 with a 14.4 EH/s hash rate. Adjusted EBITDA of $19.6-million also fell short of expectations.

Management expects an orderly decline in mining output through 2026 and 2027 as major campuses undergo conversion to HPC and AI workloads. The first of those conversions, Washington, is targeting a mid-2026 go-live. Toner said the 18-megawatt Washington site may be significantly undervalued by the market because of its exceptionally cheap electricity, noting that even a small spread between Washington’s power rate and benchmark U.S. data-centre pricing produces sizeable long-term value. He estimates the site could be worth ~$500-million, or roughly $1.00 per share.

The update also confirmed that Bitfarms can convert its Quebec infrastructure into HPC and AI use, adding another 180 megawatts of potential capacity. Toner called this a “$1-billion-plus opportunity” under reasonable assumptions. He added a modest valuation bump for Quebec into his model, assigning a 25% probability that the capacity is developed.

Bitfarms ended the quarter with $637-million in cash and 1,827 BTC valued at about $165-million, providing ample liquidity to fund the transition. The company continues to generate about $8-million per month in free cash flow from mining, even as those operations scale down. Bitfarms also secured additional financing for its Pennsylvania buildouts, including a project-specific facility for the Panther Creek campus and a US$588-million convertible debenture that employs a covered-call structure to limit dilution.

Toner reduced his Q4 and 2026 revenue forecasts after lowering his assumed hash rate exit level for 2026 to 10 EH/s, down from 18 EH/s previously. As a result, his 2026 adjusted EBITDA forecast fell significantly. Even so, he raised his valuation for Bitfarms’ HPC opportunity to $2.6-billion, reflecting a strengthened view of the potential returns available to developers of high-density GPU campuses.

His updated price target is based on a sum-of-the-parts valuation using 6x 2026 adjusted EBITDA for the mining segment and probability-weighted values for the HPC portfolio.

Toner said Bitfarms should produce US$206.8-million in Adjusted EBITDA on revenue of US$284.2-million in fiscal 2025. He said those numbers will decline to US$127.2-million on revenue of US$300.9-million in fiscal 2026 as mining winds down and HPC revenue ramps later in the cycle.

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