A Look at Bitfarms (TSX:BITF) Valuation Following Bitcoin Rally and AI Data Center Expansion Plans

Bitfarms (TSX:BITF) shares climbed 18% after Bitcoin’s surge gave the broader crypto sector a lift. The company also revealed a partnership with T5 Data Centers that hints at a push into high-performance computing and AI services.

See our latest analysis for Bitfarms.

Bitfarms has been on a tear, with a 174% 1-month share price return and a massive 244% over the last 90 days, as market enthusiasm for Bitcoin and new AI data center plans fuel momentum. Its 1-year total shareholder return is up 92%, while the five-year figure stands out at an eye-popping 1,572%. This shows long-term investors have seen substantial gains even as short-term risks remain part of the picture.

If crypto’s volatility and tech-fueled moves have your attention, it is a great time to spot what’s next in digital infrastructure and discover See the full list for free.

The question now is whether Bitfarms’ recent surge is a sign that investors are underestimating its longer-term potential, or if the market is already factoring in all the future growth that lies ahead.

Most Popular Narrative: 8% Overvalued

Bitfarms’ last close at CA$4.85 puts it above the most widely followed narrative fair value of CA$4.51. This indicates that analyst estimates have started to lag behind this rally. Here is what is driving the valuation debate.

Strategic conversion of renewable-powered mining sites (particularly in Quebec and Washington) into high-performance computing (HPC) and AI data centers aligns with the global trend toward green energy in tech infrastructure. This could potentially grant access to ESG-driven capital and regulatory support, while unlocking new high-margin revenue streams.

Read the complete narrative.

What numbers fuel this bold price target? This narrative is built on a revenue surge, a margin leap, and a future profit multiple that rivals top tech stocks. Discover which unconventional projections push this fair value above today’s price. Explore the specific milestones that must be reached for this thesis to succeed.

Result: Fair Value of $4.51 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory delays or setbacks in converting mining sites to data centers, along with heavy capital needs, could quickly shift the outlook and challenge bullish assumptions.

Find out about the key risks to this Bitfarms narrative.

Build Your Own Bitfarms Narrative

If this viewpoint does not resonate or you would rather dive into the numbers yourself, you can assemble your own story and perspective in just a few minutes. Do it your way.

A great starting point for your Bitfarms research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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