Northern Data Is Well Positioned to Take Advantage of the AI Boom: Canaccord

What to know:

Canaccord initiated coverage of Northern Data with a buy rating and 60 euro ($62) price target.
Northern Data is well positioned to take advantage of the growing artificial intelligence compute cycle, the report said.
A potential sale of the firm’s Peak Mining business could unlock significant value for the company, the broker said.

As a seasoned analyst with years of experience under my belt, I have always been intrigued by the intersection of technology and finance. Looking at Canaccord’s report on Northern Data, it seems we are witnessing another promising investment opportunity.

Northern Data, being an infrastructure provider for AI and HPC, is poised to capitalize on the burgeoning demand in this sector. The company’s Taiga Cloud business, which has just gone live, appears to be at the forefront of a significant opportunity that could potentially last for generations.

The report also mentions Northern Data’s 52% ownership by Tether, adding another layer of intrigue to the story. With the potential sale of Peak Mining on the table, this company could unlock substantial value and reinvest it in GPUs and data-center facilities. This move would undoubtedly improve their growth trajectory beyond FY25.

However, as with any investment, there are risks involved. The stock has already seen a 74% increase over the last three months, which could potentially limit further upside. But as they say in my line of work, “the trend is your friend until the end.”

Lastly, let me leave you with a little joke: Why don’t we ever tell secrets on a mine shaft? Because the walls have ears and the floor has data!

Companies offering infrastructure services, like Northern Data (NB2), stand poised to reap advantages as the need for artificial intelligence (AI) and advanced computing (HPC) intensifies, according to a report published by Canaccord Genuity on Thursday, which marked their initial coverage of the stock.

In simpler terms, financial analysts at Canaccord have recommended buying the shares, giving them a ‘buy’ rating, and predicting a price of around $62 (equivalent to approximately 60 euros) for each share. At the time the news was released, the stock was already up by 2.4% and trading at roughly 45.65 euros per share.

Analysts, including Kingsley Crane, describe companies such as Northern Data as constructing the infrastructure for the AI boom, likening it to building railroads during the gold rush. Their Taiga Cloud service has launched at the cutting edge of what appears to be a significant and long-lasting opportunity.

Mentioning a key point, the broker highlighted that Northern Data, holding a 52% stake from Tether – a company known for producing stablecoins, has previously disclosed intentions of potentially offloading its Peak Mining operations.

A possible sale could provide Northern Data with funds for purchasing GPUs and data center infrastructure, significantly expanding their growth trajectory past Financial Year 2025, as suggested in the report.

As a seasoned investor with over two decades of experience in the stock market, I have seen numerous rallies and corrections. However, the recent 74% surge in our target company’s shares over the last three months has been particularly impressive. Canaccord’s analysis supports my view that there is still potential upside to be gained from these shares. The investor appetite for this stock is evident, with a steady stream of buying activity seen during this period. I believe that a well-diversified portfolio can benefit from strategic investments in such high-performing stocks, especially if the underlying fundamentals remain strong and the momentum continues. Nonetheless, as always, it’s essential to conduct thorough due diligence and manage risk levels accordingly when making investment decisions.

2025-01-02 15:38

Northern Data Is Well Positioned to Take Advantage of the AI Boom: Canaccord

What to know:

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