NEW YORK - Bit Digital, Inc. (NASDAQ:BTBT), a New York-based digital assets and artificial intelligence infrastructure platform, has announced a substantial expansion of its existing customer contract, which will now include the supply of an additional 2,048 GPUs. This increase brings the total number of GPUs to be supplied to 4,096 over a three-year period, with the deal valued at approximately $275 million, or an annualized revenue of $92 million.
The company has placed an order for 256 servers from Dell Technologies (NYSE:DELL), an authorized Nvidia (NASDAQ:NVDA) OEM, to be equipped with 2,048 Nvidia HGX H100 GPUs and related equipment. The servers are scheduled for delivery in July 2024 and will be deployed at the company's datacenter in Iceland, with revenue generation expected to commence in August 2024.
To finance the agreement, Bit Digital will utilize a combination of cash and digital assets from its balance sheet. Additionally, the company has entered a sale-leaseback agreement for 1,024 GPUs to reduce its capital outlay and is exploring debt financing options to retroactively finance its hardware assets.
CEO Sam Tabar expressed satisfaction with the finalized terms, noting that the expanded deployment aligns with the company's goal of reaching a $100 million annualized revenue run-rate by the end of 2024. This agreement propels the company to over 90% of that target. Tabar highlighted the importance of executing effectively for customers and supporting their AI ambitions, indicating a positive growth trajectory for Bit Digital's high-performance computing (HPC) segment.
Bit Digital's operations span across the United States, Canada, and Iceland, with a focus on bitcoin mining and infrastructure services for AI applications. The company has cautioned investors about the high degree of risk involved in investing in its securities and has advised them to consider the risk factors detailed in their most recent Annual Report.
This news is based on a press release statement and includes forward-looking statements subject to assumptions, risks, and uncertainties that could cause actual results to differ from those anticipated.
In other recent news, Bit Digital reported significant developments in its operations and financial performance. The company disclosed its May 2024 revenue, amounting to an estimated $4.2 million from its Bit Digital AI contract. However, it also experienced a drop in Bitcoin production, primarily due to the recent halving event that reduced Bitcoin block rewards. Notably, Bit Digital's digital assets totaled approximately 2,188.9 BTC equivalent, or around $147.7 million, and the company's liquidity stood at roughly $195.0 million at the end of May.
Analysts from H.C. Wainwright and Noble Capital maintained a Buy and Outperform rating on Bit Digital respectively, expressing confidence in the company's high-performance computing, expansion in mining operations, and a model based on staked Ethereum. The company also received a proposal from a customer to double the Graphics Processing Units in their existing agreement, which could significantly enhance Bit Digital's AI business segment.
These recent developments illustrate the dynamic nature of Bit Digital's operations in the evolving landscape of the cryptocurrency market. However, investors are cautioned that investing in Bit Digital's securities carries risks, and past financial performance is not indicative of future results. The company's future performance could be impacted by changes in network-wide mining difficulty rate, bitcoin hash rate, and other operational factors.
InvestingPro Insights
As Bit Digital, Inc. (NASDAQ:BTBT) gears up for a significant expansion with the addition of 2,048 GPUs to its infrastructure, the company's financial health and market performance become crucial for investors tracking its growth potential. With a focus on enriching AI capabilities and bitcoin mining, Bit Digital's strategic moves are reflected in its financial metrics and market valuation. The company's market capitalization stands at a sturdy $294.04M, showcasing its substantial presence in the digital assets industry.
An attractive aspect for investors is Bit Digital's Price to Earnings (P/E) ratio, which is currently at 6.17. This figure suggests that the company's shares might be undervalued compared to its earnings potential, especially when considering the adjusted P/E ratio for the last twelve months as of Q1 2024, which is 7.35. Furthermore, the company's revenue growth is impressive, with a 109.26% increase over the last twelve months as of Q1 2024, indicating a strong upward trajectory in its earning capacity.
Among the InvestingPro Tips, it's noteworthy that Bit Digital holds more cash than debt on its balance sheet and is expected to see net income growth this year. This financial stability is critical as the company invests in expanding its GPU capacity. However, potential investors should be aware of the volatility in the stock's price movements, as indicated by the 37.69% hit over the last six months, and the fact that the company does not pay a dividend to shareholders.
For those considering a deeper dive into Bit Digital's financials and market performance, InvestingPro offers a comprehensive list of tips, with 11 additional insights available at https://www.investing.com/pro/BTBT. To access these insights, users can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of information to inform investment decisions.
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