Frankfurt-based technology company Northern Data, most prominently known for Bitcoin mining, recently shifted its business model to cloud solutions and data center infrastructure. The shift caught the attention of investment bank Berenberg, which initiated coverage of the company's shares with a buy rating and a price target of €39 ($41.84) per share, indicating a potential upside of 53.2% from the current stock price as of April 26. Northern Data, listed on the Frankfurt Stock Exchange, has three core divisions: Peak Mining for bitcoin mining, Taiga Cloud for cloud computing, and Ardent Data Centers for data center infrastructure. Berenberg argues that the market has largely ignored the growth prospects of Taiga Cloud's offerings. Northern Data shares are also traded over-the-counter in Italy and the United States, but trading frequency and volumes are expected to be very low. NB2-DE 1Y line The business shift is not the first for the company, which has been listed since 2015. Formerly known as Biosilu Healthcare, the company was a pharmaceutical broker in Asian markets until early 2018. It then pivoted to cryptocurrency mining operations and was re-established. It is named Northern Bitcoin, making it one of the first listed companies to enter the cryptocurrency space. In its current form, Northern Data continues to evolve with the acquisition of a data center in Pittsburgh earlier this year. The company said it will expand the facility fourfold by the second half of next year. Northern Data is also expected to benefit from the progress its subsidiary Ardent Data Centers has made in liquid cooling technology in cryptocurrency mining operations over the years. “We believe Northern Data's significant investments in state-of-the-art liquid cryogenic mining technology and the company's expansion into its existing North Dakota and new Texas locations will enable it to achieve high bitcoin production and mining profitability,” Berenberg analysts said. Gerhard Orgonas and Gina Shaw said in a note to clients on April 25. “We believe Northern Data's knowledge in energy-efficient, state-of-the-art, liquid-cooled data centers makes it a competitive provider of colocation services, especially given the increasing efficiency requirements of generative AI applications.” The investment bank estimates that Peak Mining could generate revenues of more than €170 million by next year, with adjusted margins of more than 40%. But it's Northern Data's cloud solutions that analysts are eyeing. The company's Taiga Cloud division has been certified as an “elite” partner of Nvidia, making it one of the largest providers of Nvidia-based cloud services in Europe. The investment bank expects annual revenues of around €400 million and adjusted earnings of around €290 million from Taiga Cloud from 2026 onwards. Northern Data's cloud computing platform is expected to contain 20,000 Nvidia AI chips, worth €730 million, by the third quarter of 2024, the memo said. Northern Data's founder and CEO, Arush Thalinathan, also showed his confidence in the company by Announcing plans to acquire shares worth up to 30 million euros this year. As of March 21, Thillinathan's stake in Northern Data Group has increased to 3.8 million shares, representing about 7.15% of the company's current share capital, the company said.
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Berenberg Says Bitcoin Mining Firm and Nvidia AI Cloud Partner Northern Data Could Surge 50%
