Digi Power X
A former bitcoin miner becoming a landlord for AI: it builds power-connected, liquid-cooled halls and rents each one whole to a single tenant for a fixed monthly fee.
Our viewUnattractive Medium conviction
The scores
The profile · 1-4
Growth1/4 ↑
Revenue fell 7.6% in 2025 and 18.3% in Q2 2026 as hosting winds down; the growth exists only in a contract that bills from December.
Business quality2/4 →
Power-secured sites are real, but every converted miner named sells the same hall to the same tenants; the one contract was won on a date.
Financial position2/4 ↑
No debt and $142M of cash, but Phase 2 needs an unsigned loan and the 10-Q says the agreement is at risk without it.
Execution record2/4 →
The substation and pod were delivered, but the $40M spending guide became $110M, cash includes crypto, and a share-sale statement contradicted that day's 10-Q.
Per share capture1/4 ↓
Shares tripled since 2024, the sale programme is spent with no loan signed, share pay is half of revenue, and Phase 2 may be share-funded.
Potential2/4 ↑
Phase 1 is committed, funded and in the ground; the 25 MW carrying most of the contract awaits a loan, and the rest is unsigned.
Risk profile2/4 →
One tenant, one building, a ready-for-service date with termination behind it, resolving inside the horizon; plus a father-son executive pair on a 17-person staff.
Valuation2/4 ↑
$275M above cash buys one contracted building plus a second nobody signed; Fair only if Phase 2's loan closes at a rate the fee carries.
Evidence quality3/4 →
Central facts are filed: the 10-Q note, the redacted agreement, the buyer's filings; the economics are estimates because charges, prepayments and power price are undisclosed.
The bet · 2-3 years
Speculation5.1×
If it works 5.1× · if it fails you keep up to 84%.
The Verdict
We rate Digi Power X unattractive. Once a bitcoin miner, it is building a hall in Alabama that an AI chip company has leased on a long contract. The contract is real, but the business is weak: one tenant, one building, and a share count that has tripled while paying for it. The price is full, not cheap: it counts that building finished plus a second nobody has signed, paying now for a tenant not yet found. As a bet it is speculative: if a second tenant signs and the loan closes, the business could be worth about four times today; if not, much of the money could go.
The long caseIf AI tenants keep running short of halls built for hot, water-cooled chips, a small owner with power and a finished building can lease it on long contracts.
The evidence under this - 8 claims
C01facthigh confidence
In 2025 the company earned $34.2M: $17.5M hosting other people's bitcoin miners, $13.2M selling power from its 60 MW North Tonawanda gas plant and $3.5M mining for itself. Revenue fell 7.6% from 2024.
C04facthigh confidence
On 4 May 2026 the company signed a ten-year colocation and master services agreement with Cerebras Systems for about 40 MW at Columbiana, Alabama: an exclusive licence to the whole facility, Phase 1 of 15 MW ready for service targeted 15 December 2026, Phase 2 of 25 MW targeted by the end of Q1 2027 and conditioned on financing, about $1.1B of contract value in the initial term and $2.5B with a seven-year extension.
C49inferencemedium confidence
At $4.09 the market values the company at about $417M, about $275M above its $142.4M of cash and crypto. The contracted building, once built and after power, yields at most about $66M a year before site and corporate costs, and Phase 2 still needs a loan; so the price pays for the building finished and debt-funded and for roughly one more of its size that nobody has signed.
derivedC22 (price), C19 (102.1M shares: 98.5M + 2.85M + 0.67M), C23 (cash and crypto), C08 (fee after power), C48 (overhead), C27 (Phase 2 unfunded); $4.09 × 102.1M = $417.6M; $417.6M − $142.4M = $275.2M.
against this
- If the Cerebras non-recurring charges and prepayments are large, the building costs the company less than the $110M spent so far suggests, and the equity's share of the fee is higher than this reading allows (C10).
- The New York sites' 141.7 MW, the North Carolina land and the West Virginia letter of intent are carried here at nothing; if any is contracted the second building is not hypothetical.
- A project loan on Phase 2, if signed at a rate the fee carries, would leave the $66M to the equity net of interest, which at the market value above cash is a plausible return rather than a full price.
C19facthigh confidence
Subordinate voting shares outstanding rose from 33.0 million at 31 December 2024 to 69.4 million at 31 December 2025 and 98.5 million at 30 June 2026, with 2.85 million more issued after the quarter; 3,333 proportionate voting shares convert into 666,600 more. Weighted diluted shares were 85.5 million in Q2 2026 against 36.6 million in Q2 2025.
C08estimatemedium confidence
Electricity for 40 MW of IT load at 7.84 cents costs at least $27.5M a year before cooling overhead, and each tenth of a point of power-usage effectiveness adds about $2.7M, so the contract yields at most about $66M a year before cooling, staff, maintenance and the cost of building it.
derivedC05 and C07: 40,000 kW × 8,760 hours × $0.0784 = $27.5M; ÷ 10 = $2.75M for each 0.1 of PUE; $93.6M − $27.5M = $66.1M.
against this
- A large-load contract with Alabama Power may price below or above the state industrial average; the delivery agreement's rate is not disclosed, and the Alabama PSC tariff was not fetched (open question).
- The company's 10-K reports 89% of its New York electricity as zero-carbon and a 60 MW hydro allocation, but the Cerebras hall is in Alabama, served by Alabama Power, so the New York power does not help this contract.
C25management claimmedium confidence
Management targets an annualised revenue run-rate of $250M to $300M by Q3 2027: about $140M contracted, AI colocation of $80M to $100M in fiscal 2027 from Cerebras with 90 MW of colocation targeted in total, GPU rental scaling to 10 MW for a year-end run-rate of up to $100M, energy sales of about $12M; and Q3 2026 revenue is guided to more than double Q2's.
sourceQ2 2026 results release, Exhibit 99.1 to the 8-K of 14…primaryOperations and financial update, Exhibit 99.1 to the 8-K of…primaryQ1 2026 results release, Exhibit 99.1 to the 8-K of 15 May…primaryQ2 2026 earnings call transcriptprimary
against this
- The contracted piece is one agreement whose second phase is conditioned on financing not yet raised (C27), and the 50 MW and 10 MW beyond it have no signed customer.
- The GPU run-rate of $100M on 10 MW implies about $10M of revenue for each megawatt against the $1.08M earned in five weeks on 0.6 MW, and the fleet to reach it would cost several times the $48.3M deployed so far (C14, C15).
- The company guided $40M of capital spending for fiscal 2026 in March and reported about $110M deployed by August (C28).
C29factmedium confidence
The 10-K's properties item lists 55 MW available at the Alabama site and 141.7 MW at the New York sites, 196.7 MW in total; the FY2025 results release describes Alabama as '70MW approved' and a '400-megawatt' pipeline including 200 MW of future North Carolina development.
sourceForm 10-K for the fiscal year ended 31 December 2025primaryFiscal 2025 results release, Exhibit 99.1 to the 8-K of 31…primary
against this
The two documents were filed the same day and give different Alabama figures; the 10-K is the signed one and is what this thesis carries.
C22facthigh confidence
The shares closed at $4.09 on 18 September 2026, 55.5% below the 52-week high of $9.20 set on 13 May 2026, eight days after the Cerebras announcement, and 120% above the 30 March 2026 low of $1.86; over 252 sessions the price rose 59.1% while trailing revenue for each diluted share fell 60.0% and the diluted share count rose 133.4%.
The company
AI chips draw so much power and heat that ordinary data halls struggle to cope. Digi Power X sells the building around them: its own substation, two independent power paths, backup supply and liquid cooling, so any part can be serviced without switching the hall off.
The tenant brings its computers. Cerebras chose this over converting other people's halls, which its own prospectus calls slow, costly and less efficient.
The evidence under this - 4 claims
C40factmedium confidence
A Cerebras CS-3 is a 15U system drawing up to 23 kW, water-cooled, by Cerebras's own comparison page; the company's Alabama hall is described as built to Rated 3 standards with redundant utility feeds, N+1 uninterruptible supply and a two-loop cooling architecture of cooling distribution units and chillers.
C39facthigh confidence
The Uptime Institute defines a Tier III data centre as concurrently maintainable, with redundant components and redundant distribution paths, requiring no shutdown when equipment needs maintenance or replacement.
C12facthigh confidence
Cerebras's prospectus says it leases or licenses third-party data centres in California, Oklahoma and Canada and does not control them, that retrofitting generic halls for its systems is 'time consuming, expensive, and less efficient than if we were to lease from spaces already designed for our operations', and that OpenAI has agreed to deploy 750 MW of Cerebras compute under a deal valued above $20B.
C04facthigh confidence
On 4 May 2026 the company signed a ten-year colocation and master services agreement with Cerebras Systems for about 40 MW at Columbiana, Alabama: an exclusive licence to the whole facility, Phase 1 of 15 MW ready for service targeted 15 December 2026, Phase 2 of 25 MW targeted by the end of Q1 2027 and conditioned on financing, about $1.1B of contract value in the initial term and $2.5B with a seven-year extension.
How it makes money
Three small businesses pay the bills today, and all three lost money in the June quarter: hosting other people's bitcoin miners, selling power from the gas plant, and renting out GPU servers.
The one that matters starts in December. Cerebras pays $195 a kilowatt each month, rising 3% a year, whether it uses the space or not. Power comes out of that fee, and in Alabama it costs at least $27.5M a year for the full hall.
The evidence under this - 4 claims
C47facthigh confidence
The legacy colocation business hosted about 9,700 bitcoin miners in 2025; in Q2 2026 it earned $3.43M against $4.69M of cost of revenue and lost $3.92M, having made $0.38M a year earlier, and the energy segment earned $1.96M against $2.32M of cost.
C14facthigh confidence
At 30 June 2026 the company carried $48.3M of computing hardware leased to customers, depreciated straight-line over the greater of the lease term or three years; the Tier III AI segment's Q2 2026 depreciation was $2.68M against $1.08M of revenue and $0.91M of cost of revenue, a segment net loss of $2.96M.
C05facthigh confidence
The colocation fee is a fixed, take-or-pay $195.00 for each kilowatt each month, stated in the agreement as all-in including delivered power, rising 3.0% a year: about $2.925M a month for Phase 1 and $4.875M a month for Phase 2.
C08estimatemedium confidence
Electricity for 40 MW of IT load at 7.84 cents costs at least $27.5M a year before cooling overhead, and each tenth of a point of power-usage effectiveness adds about $2.7M, so the contract yields at most about $66M a year before cooling, staff, maintenance and the cost of building it.
derivedC05 and C07: 40,000 kW × 8,760 hours × $0.0784 = $27.5M; ÷ 10 = $2.75M for each 0.1 of PUE; $93.6M − $27.5M = $66.1M.
against this
- A large-load contract with Alabama Power may price below or above the state industrial average; the delivery agreement's rate is not disclosed, and the Alabama PSC tariff was not fetched (open question).
- The company's 10-K reports 89% of its New York electricity as zero-carbon and a 60 MW hydro allocation, but the Cerebras hall is in Alabama, served by Alabama Power, so the New York power does not help this contract.
Where the money comes from, stream by stream
| Stream | Share of sales (Q2 2026) | How it earns it |
|---|---|---|
| Colocation (hosting bitcoin miners) | 51.7% | Charges miners' owners to house and power their machines in New York; a legacy business losing money and winding down. |
| Energy sales | 29.5% | Sells electricity from the 60 MW North Tonawanda gas plant into the New York grid. |
| AI data centers (GPU rental) | 16.3% | Rents NVIDIA GPU servers to one customer, SubQ AI, billed on usage; Cerebras's fixed colocation fee joins this segment from December 2026. |
| Cryptocurrency mining | 2.4% | Mines bitcoin on its own machines; nearly wound down. |
Who runs it
Michel Amar has run the company since 2020, with his son Alec as president. The pair turned a bitcoin miner into an AI landlord and signed Cerebras, but spent about $110M on building in 2026 against the $40M they planned. Insiders owned about 12% in April, before many more shares were sold. Their bonuses reward a positive adjusted profit figure and a bigger stock-market value, which selling new shares also raises.
The evidence under this - 4 claims
C62facthigh confidence
Michel Amar has been chief executive and chairman since February 2020 and his son Alec Amar president and a director since February 2020; Paul Ciullo has been chief financial officer since April 2021, having held the post from 2018 to 2020; Jaganathan Jeyapaul, formerly of Equinix, Oracle and VeriSign, became chief technology officer in December 2025.
C28facthigh confidence
The FY2025 results release said the balance sheet would 'self-fund the initial capital expenditure program of $40 million in fiscal 2026'; by 14 August 2026 management reported about $110M of year-to-date capital investment and equipment deposits.
sourceFiscal 2025 results release, Exhibit 99.1 to the 8-K of 31…primaryQ2 2026 results release, Exhibit 99.1 to the 8-K of 14…primary
against this
The Cerebras agreement was signed after the March guidance, so the larger programme has a contracted reason; what did not change was that it was funded by the ATM rather than the balance sheet the release described.
C63facthigh confidence
At 27 April 2026 directors and executive officers as a group beneficially owned 8.88 million subordinate voting shares, 11.77% of the 72.8 million outstanding, and 12.55% of the votes, counting fully vested options; Michel Amar held 9.24% and 10.05% of the votes, including 1.415 million options and, through NYAM, all 3,333 proportionate voting shares at 200 votes each. No other holder above 5% was known to the company.
against this
- The percentages are struck on 72.8 million shares; the count was 98.5 million at 30 June 2026 with 2.85 million more sold after (C19), so unless insiders added shares the group's stake has since been diluted to well under its April figure.
- Most of the chief executive's position is held through three companies he controls (Bit Mining International, Bit.Management and NYAM), and 1.415 million of it is options rather than shares.
C64facthigh confidence
The chief executive was paid $12.03M for 2025 (salary $0.97M, bonus $0.875M, restricted units $5.42M, options $4.76M) and the president $7.43M, together 57% of 2025 revenue. Their August 2025 agreements set a subjective annual bonus with minimums of 50% or 100% of salary conditioned on positive adjusted EBITDA and year-on-year growth in market value, plus a one-time bonus of a full year's salary at each market-value milestone from $200M to $1B; options vest in full on grant and 24 months' salary is paid on termination without cause.
sourceForm 10-K/A Amendment No. 1 - Part IIIprimaryForm 10-K for the fiscal year ended 31 December 2025primary
against this
- Adjusted EBITDA as the company defines it kept a $7.69M currency gain in Q2 2026 while the FY2025 table added back a currency loss (C16, C17), so the measure the bonus floor turns on is one the company's own definition flatters.
- Market value rises with share issuance as well as with the share price: the share count tripled from 2024 to mid-2026 (C19), so the milestones can be crossed by selling stock rather than by raising its value per share.
Why it wins, and who could beat it
Why customers come back
The scarce thing is power already delivered. The company holds 196.7 megawatts of connected power across Alabama and New York, when North America's main markets have 1.4% of space empty and New York has paused permits for new large data centres.
The proof so far is one contract: Cerebras, which leases every hall it uses, signed for the whole Alabama building for ten years before it existed.
The evidence under this - 5 claims
C29factmedium confidence
The 10-K's properties item lists 55 MW available at the Alabama site and 141.7 MW at the New York sites, 196.7 MW in total; the FY2025 results release describes Alabama as '70MW approved' and a '400-megawatt' pipeline including 200 MW of future North Carolina development.
sourceForm 10-K for the fiscal year ended 31 December 2025primaryFiscal 2025 results release, Exhibit 99.1 to the 8-K of 31…primary
against this
The two documents were filed the same day and give different Alabama figures; the 10-K is the signed one and is what this thesis carries.
C36factmedium confidence
CBRE's first-half 2026 North America survey puts primary-market vacancy at a record low 1.4%, under-construction capacity at 7,481.1 MW after 24.8% growth in the half, 80.4% of that already committed against 74.3% a year earlier, and under 1,500 MW still available, about six months of demand.
C30factmedium confidence
On 14 July 2026 New York's governor signed an executive order pausing discretionary state environmental permits for new hyperscale data centres for up to a year; the company's 10-Q describes it as barring new centres using 50 MW or more, and its chief executive says the two New York sites are grandfathered, using about 60 MW and 18 MW, and cannot expand their power.
sourceGovernor of New York - First statewide moratorium on new…primaryForm 10-Q for the quarter ended 30 June 2026primaryQ2 2026 earnings call transcriptprimary
against this
Whether converting an existing permitted mining site to an AI hall needs a new discretionary permit is not addressed by the order's announcement or by the company; the conversion is targeted only for late 2027 (C31).
C12facthigh confidence
Cerebras's prospectus says it leases or licenses third-party data centres in California, Oklahoma and Canada and does not control them, that retrofitting generic halls for its systems is 'time consuming, expensive, and less efficient than if we were to lease from spaces already designed for our operations', and that OpenAI has agreed to deploy 750 MW of Cerebras compute under a deal valued above $20B.
C04facthigh confidence
On 4 May 2026 the company signed a ten-year colocation and master services agreement with Cerebras Systems for about 40 MW at Columbiana, Alabama: an exclusive licence to the whole facility, Phase 1 of 15 MW ready for service targeted 15 December 2026, Phase 2 of 25 MW targeted by the end of Q1 2027 and conditioned on financing, about $1.1B of contract value in the initial term and $2.5B with a seven-year extension.
The threat
Converted miners with a head start compete for the same tenants. Core Scientific has leased 590 megawatts, mostly to CoreWeave. TeraWulf has 522 contracted, with Google standing behind part of the rent. Applied Digital delivers standard 150-megawatt buildings in 14 to 18 months. Digi Power X is still building its first hall.
The evidence under this - 3 claims
C33facthigh confidence
Core Scientific's 2025 10-K reports 1,426 MW of gross utility power, 920 MW of leasable customer power, 590 MW leased, 120 MW billable at year-end, colocation revenue of $65.4M in 2025, and an intention to convert every megawatt to high-density colocation within three years.
C34facthigh confidence
TeraWulf's 2025 10-K reports 522 MW of critical IT load contracted at its two campuses, including 378 MW leased to Fluidstack with Google credit support and 60 MW to Core42, on leases of ten to twenty-five years with escalators.
C35facthigh confidence
Applied Digital's fiscal 2026 10-K describes a standardised design delivering data centres of about 150 MW in about 14 to 18 months, qualified by major hyperscalers, leased to investment-grade hyperscalers under long-term lease and hosting arrangements.
The rivals: CORZ, WULF, APLD, IREN, CRWV, RIOT, HUT, KEEL, HIVE, CIFR.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| CORZ | Core Scientific, Inc.Priced against it: One segment only | AI and HPC colocation | On sale | One segment only |
| WULF | TeraWulf Inc.Priced against it: One segment only | AI and HPC colocation | On sale | One segment only |
| APLD | Applied Digital Corp.Priced against it: Same product | AI and HPC colocation | On sale | Same product |
| IREN · CRWV | IREN Ltd (NVIDIA Cloud Partner) and CoreWeave, Inc.Priced against it: Different product | NeoCloudz bare-metal GPU rental | On sale | Different product |
| RIOT · HUT · KEEL · HIVE · CIFR | Riot Platforms, Hut 8, Bitfarms, HIVE and Cipher - the hosts Digi Power X's own 10-K namesPriced against it: One segment only | Legacy bitcoin-miner hosting and the North Tonawanda gas peaker | On sale | One segment only |
How big it could get
How big this could get
North America's main data-centre markets had 7,481 megawatts under construction in the first half of 2026, 80.4% already spoken for. None of those markets includes Alabama, so Digi Power X's own market cannot be sized. The clearest bound is its one buyer: Cerebras has promised OpenAI 750 megawatts of computing, against 40 contracted here.
The evidence under this - 3 claims
C36factmedium confidence
CBRE's first-half 2026 North America survey puts primary-market vacancy at a record low 1.4%, under-construction capacity at 7,481.1 MW after 24.8% growth in the half, 80.4% of that already committed against 74.3% a year earlier, and under 1,500 MW still available, about six months of demand.
C12facthigh confidence
Cerebras's prospectus says it leases or licenses third-party data centres in California, Oklahoma and Canada and does not control them, that retrofitting generic halls for its systems is 'time consuming, expensive, and less efficient than if we were to lease from spaces already designed for our operations', and that OpenAI has agreed to deploy 750 MW of Cerebras compute under a deal valued above $20B.
C04facthigh confidence
On 4 May 2026 the company signed a ten-year colocation and master services agreement with Cerebras Systems for about 40 MW at Columbiana, Alabama: an exclusive licence to the whole facility, Phase 1 of 15 MW ready for service targeted 15 December 2026, Phase 2 of 25 MW targeted by the end of Q1 2027 and conditioned on financing, about $1.1B of contract value in the initial term and $2.5B with a seven-year extension.
Who has signed
Cerebras has signed firmly for the first 15 megawatts, due 15 December 2026. The other 25 megawatts depend on finance both sides accept. The GPU customer's $19.6M contract is only expected value: after a $2.95M upfront payment, it pays for what it uses.
The evidence under this - 4 claims
C04facthigh confidence
On 4 May 2026 the company signed a ten-year colocation and master services agreement with Cerebras Systems for about 40 MW at Columbiana, Alabama: an exclusive licence to the whole facility, Phase 1 of 15 MW ready for service targeted 15 December 2026, Phase 2 of 25 MW targeted by the end of Q1 2027 and conditioned on financing, about $1.1B of contract value in the initial term and $2.5B with a seven-year extension.
C09facthigh confidence
If Phase 1 misses its date the company pays Cerebras daily delay credits as a redacted share of the monthly base fee after a cure period; if a final outside date is missed Cerebras may terminate without penalty and recover unapplied prepaid fees and non-recurring charges; the agreement also calls for a letter of credit, amount redacted.
C27facthigh confidence
The Q2 2026 10-Q states the company expects to require additional financing, including project-level debt, to complete the campus; that full deployment of Phase 2 is conditioned on securing adequate financing; and that if it cannot, it may have to delay, curtail or abandon development plans, 'including our ability to satisfy our obligations under our AI colocation agreement'.
C13facthigh confidence
The SubQ AI GPU rental runs 24 months from 15 May 2026 with an 'expected total contract value' of about $19.6M and a $2.95M non-refundable upfront payment; the 10-Q records the consideration as 'entirely variable based on actual usage' with 'no material future fixed minimum lease payments to be received'.
The results
The numbers
Is it growing?Shrinking
Sales fell 7.6% in the year to Dec 2025.
Is it profitable?Losing
It lost 83% of sales.
What does it keep on each sale?Razor-thin
It keeps -9¢ of each sales dollar after making what it sells, and spends 48¢ of it on admin, its biggest running cost.
Does it earn good returns?Poor
Shareholders' money lost 39% a year, up from −56% in the year to Dec 2024.
How long can it keep going?Limited
It used $42.8M of cash in the latest year, so the $78.5M it holds lasts about 1.8 years at that pace.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-04. Fiscal years end in December.
| Dec 2024 | Dec 2025 | |
|---|---|---|
| Size and growth | ||
| Sales | $37.0M | $34.2M |
| Sales growth | - | −7.6% |
| Profit | ||
| Gross margin | −31% | −9.4% |
| Net margin | −33% | −83% |
| What growth costs, per sales dollar | ||
| General and admin | 20% | 48% |
| Pay in shares | 6.9% | 23% |
| Capital spending | 10% | 51% |
| Cash | ||
| Cash from operations | −$17.5M | −$25.5M |
| Free cash flow | −$21.3M | −$42.8M |
| Balance sheet | ||
| Cash and short-term investments | $1.70M | $78.5M |
| Returns and shares | ||
| Shares (diluted) | 30.7M | 44.5M |
What growth costs
So far growing has made the company less profitable: office costs, pay in shares and building spending have all risen much faster than sales, which fell. That is spending ahead of a fixed rent that starts in December; whether it pays off depends on that rent arriving on time.
The evidence under this - 3 claims
C66facthigh confidence
The filer tags no research and development or sales and marketing line. General and administrative cost rose from $7.28M, 19.7% of revenue, in 2024 to $16.34M, 47.8%, in 2025; share-based pay from 6.9% to 23.5%; capital spending from 10.2% to 50.6%; revenue fell from $37.0M to $34.2M. Q2 2026 general and administrative cost was $9.49M against $3.89M a year earlier.
sourceForm 10-K for the fiscal year ended 31 December 2025primaryForm 10-Q for the quarter ended 30 June 2026primary
against this
The spending is for a building that bills from December 2026 at a fixed fee (C04, C05); overhead of about $15M a year in cash (C48) set against a contract worth $35M to $94M a year would read very differently once it bills.
C44facthigh confidence
Share-based compensation was $8.03M in 2025, 23% of revenue, and $7.10M in the first half of 2026, 49% of revenue; May 2026 grants added 650,000 options and 1.73 million restricted units.
C05facthigh confidence
The colocation fee is a fixed, take-or-pay $195.00 for each kilowatt each month, stated in the agreement as all-in including delivered power, rising 3.0% a year: about $2.925M a month for Phase 1 and $4.875M a month for Phase 2.
The last report (14 Aug)
Quarter ended June 2026, filed figures.
-16.8%
Growth from the quarter before
against -1.8% the quarter before that
The June 2026 quarter caught the old business shrinking before the new one had started. Revenue fell 18.3% to $6.63M, with the first GPU rental adding $1.08M from five weeks, and the company lost $14.36M.
The release led with a positive adjusted profit of $3.3M. That figure kept a $7.69M currency gain, although a currency loss was taken out the year before. Without the gain it was a loss of about $4.3M.
What it did to the thesisIt confirmed the Unattractive view: the old business shrank before the new rental income arrived, and the headline adjusted profit only looked positive because it kept a currency gain. Nothing in it eased the main worry, which is how the building gets funded without more shares.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $-0.17 against $-0.05 expected; $-0.17 as filed, with no adjustments.
The evidence under this - 4 claims
C02facthigh confidence
Q2 2026 revenue was $6.63M, down 18.3% from $8.11M in Q2 2025: colocation $3.43M (from $4.49M), energy sales $1.96M, the first GPU rental $1.08M from about five weeks, and mining $0.16M.
C03facthigh confidence
Q2 2026 gross loss was $5.52M after $8.08M of cost of revenue and $4.07M of depreciation; general and administrative cost was $9.49M against $3.89M a year earlier; net loss $14.36M.
C16facthigh confidence
Q2 2026 'positive adjusted EBITDA' of $3.3M is net loss of $14.4M plus $4.1M depreciation, $5.8M share-based pay, $2.8M crypto revaluation loss and $5.0M warrant loss; the reconciliation does not remove the $7.69M foreign-exchange gain booked in operating expenses.
C17estimatehigh confidence
Without the currency gain, Q2 2026 adjusted EBITDA is about −$4.3M; the FY2025 reconciliation added back a $3.5M currency loss, so losses are excluded and gains are kept.
derivedC16 and the FY2025 release: $3.39M − $7.69M = −$4.30M.
against this
The company's stated definition excludes 'changes in fair value of financial instruments' and does not mention foreign exchange in either direction, so the asymmetry may be inconsistency rather than design; the FY2025 add-back is nonetheless in its own table.
What management did with the money
It sold shares, fast: 27.95 million for $163.2M in the first half of 2026. The chief executive told the August call none had been sold below $7.25; the filing that day showed 2.85 million sold after June at about $3.95. Building cost about $110M against a $40M plan.
Insiders in 2026Q2: 2 purchases and 3 sales, from their Form 4 filings.
The evidence under this - 3 claims
C20facthigh confidence
The at-the-market programme sold 27.95 million shares for $163.2M in the first half of 2026, about $5.84 a share, and 2.85 million shares for $11.26M after 30 June, about $3.95 a share; the US programme was upsized to $175M on 8 May 2026, so about $174.5M of it is used, at a commission of up to 3%.
C21facthigh confidence
On the 14 August 2026 call the chief executive said the last ATM draw was at $7.25 or $7.50 a share and that no dollars were drawn below that; the 10-Q filed the same day discloses 2.85 million shares sold after 30 June for $11.26M, about $3.95 a share.
C28facthigh confidence
The FY2025 results release said the balance sheet would 'self-fund the initial capital expenditure program of $40 million in fiscal 2026'; by 14 August 2026 management reported about $110M of year-to-date capital investment and equipment deposits.
sourceFiscal 2025 results release, Exhibit 99.1 to the 8-K of 31…primaryQ2 2026 results release, Exhibit 99.1 to the 8-K of 14…primary
against this
The Cerebras agreement was signed after the March guidance, so the larger programme has a contracted reason; what did not change was that it was funded by the ATM rather than the balance sheet the release described.
The price, and where we disagree
In short. Full. The price pays for the contracted building finished with borrowed money, and for a second building that has no tenant. Each new share the company sells shrinks what a holder owns of both.
Share price
$3.19
close,
Price for each $1 of sales
9.8
its 6-year normal 2.9
Price for each $1 of net worth
1.3
its 6-year normal 2.2
The first phase is due to open on 15 December 2026, and the September-quarter results, due around 12 November, come first. Management promised revenue more than double June's and a loan for the second phase, with Goldman Sachs arranging it. The report will show whether the loan was signed, or more shares sold instead.
The evidence under this - 5 claims
C09facthigh confidence
If Phase 1 misses its date the company pays Cerebras daily delay credits as a redacted share of the monthly base fee after a cure period; if a final outside date is missed Cerebras may terminate without penalty and recover unapplied prepaid fees and non-recurring charges; the agreement also calls for a letter of credit, amount redacted.
C25management claimmedium confidence
Management targets an annualised revenue run-rate of $250M to $300M by Q3 2027: about $140M contracted, AI colocation of $80M to $100M in fiscal 2027 from Cerebras with 90 MW of colocation targeted in total, GPU rental scaling to 10 MW for a year-end run-rate of up to $100M, energy sales of about $12M; and Q3 2026 revenue is guided to more than double Q2's.
sourceQ2 2026 results release, Exhibit 99.1 to the 8-K of 14…primaryOperations and financial update, Exhibit 99.1 to the 8-K of…primaryQ1 2026 results release, Exhibit 99.1 to the 8-K of 15 May…primaryQ2 2026 earnings call transcriptprimary
against this
- The contracted piece is one agreement whose second phase is conditioned on financing not yet raised (C27), and the 50 MW and 10 MW beyond it have no signed customer.
- The GPU run-rate of $100M on 10 MW implies about $10M of revenue for each megawatt against the $1.08M earned in five weeks on 0.6 MW, and the fleet to reach it would cost several times the $48.3M deployed so far (C14, C15).
- The company guided $40M of capital spending for fiscal 2026 in March and reported about $110M deployed by August (C28).
C26management claimmedium confidence
Management reports Phase 1 on schedule for 15 December 2026, all long-lead equipment secured and arriving, the dedicated substation complete with grid interconnection finalised and a power delivery agreement with Alabama Power in place, Phase 2 equipment due in November and December, and that it is in advanced discussions with lenders with Goldman Sachs engaged to syndicate the financing.
sourceOperations and financial update, Exhibit 99.1 to the 8-K of…primaryOperations and financial update, Exhibit 99.1 to the 8-K of…primaryQ2 2026 results release, Exhibit 99.1 to the 8-K of 14…primaryQ2 2026 earnings call transcriptprimary
against this
- The same 10-Q states that financing 'may not be available on acceptable terms or at all' and that without it the company may be unable to satisfy the Cerebras agreement (C27).
- The company's delivery record for a Tier III hall is one 1 MW modular pod live since May 2026; the 10-K lists 17 employees.
C27facthigh confidence
The Q2 2026 10-Q states the company expects to require additional financing, including project-level debt, to complete the campus; that full deployment of Phase 2 is conditioned on securing adequate financing; and that if it cannot, it may have to delay, curtail or abandon development plans, 'including our ability to satisfy our obligations under our AI colocation agreement'.
C20facthigh confidence
The at-the-market programme sold 27.95 million shares for $163.2M in the first half of 2026, about $5.84 a share, and 2.85 million shares for $11.26M after 30 June, about $3.95 a share; the US programme was upsized to $175M on 8 May 2026, so about $174.5M of it is used, at a commission of up to 3%.
The betSpeculation
If it works
5.1×
from today's value, at the stated multiple
If it fails
keep up to 84%
of today's market value: at most, with what is left counted at book value
How we read the multiple
At $4.09 on 18 September the market valued the company at about $417M, about $275M more than its cash and crypto. The contracted Alabama building, fully let, earns at most about $66M a year after power, before cooling, staff and upkeep, and half of it still needs a loan.
So the price pays for that building finished and debt-funded, plus roughly one more like it that nobody has signed. Meanwhile the share count more than doubled in a year.
Against its own history. Far dearer than usual per dollar of sales, because sales shrank as the shares rose. Against what it owns it looks cheaper: the new shares brought cash.
The evidence under this - 4 claims
C49inferencemedium confidence
At $4.09 the market values the company at about $417M, about $275M above its $142.4M of cash and crypto. The contracted building, once built and after power, yields at most about $66M a year before site and corporate costs, and Phase 2 still needs a loan; so the price pays for the building finished and debt-funded and for roughly one more of its size that nobody has signed.
derivedC22 (price), C19 (102.1M shares: 98.5M + 2.85M + 0.67M), C23 (cash and crypto), C08 (fee after power), C48 (overhead), C27 (Phase 2 unfunded); $4.09 × 102.1M = $417.6M; $417.6M − $142.4M = $275.2M.
against this
- If the Cerebras non-recurring charges and prepayments are large, the building costs the company less than the $110M spent so far suggests, and the equity's share of the fee is higher than this reading allows (C10).
- The New York sites' 141.7 MW, the North Carolina land and the West Virginia letter of intent are carried here at nothing; if any is contracted the second building is not hypothetical.
- A project loan on Phase 2, if signed at a rate the fee carries, would leave the $66M to the equity net of interest, which at the market value above cash is a plausible return rather than a full price.
C08estimatemedium confidence
Electricity for 40 MW of IT load at 7.84 cents costs at least $27.5M a year before cooling overhead, and each tenth of a point of power-usage effectiveness adds about $2.7M, so the contract yields at most about $66M a year before cooling, staff, maintenance and the cost of building it.
derivedC05 and C07: 40,000 kW × 8,760 hours × $0.0784 = $27.5M; ÷ 10 = $2.75M for each 0.1 of PUE; $93.6M − $27.5M = $66.1M.
against this
- A large-load contract with Alabama Power may price below or above the state industrial average; the delivery agreement's rate is not disclosed, and the Alabama PSC tariff was not fetched (open question).
- The company's 10-K reports 89% of its New York electricity as zero-carbon and a 60 MW hydro allocation, but the Cerebras hall is in Alabama, served by Alabama Power, so the New York power does not help this contract.
C27facthigh confidence
The Q2 2026 10-Q states the company expects to require additional financing, including project-level debt, to complete the campus; that full deployment of Phase 2 is conditioned on securing adequate financing; and that if it cannot, it may have to delay, curtail or abandon development plans, 'including our ability to satisfy our obligations under our AI colocation agreement'.
C22facthigh confidence
The shares closed at $4.09 on 18 September 2026, 55.5% below the 52-week high of $9.20 set on 13 May 2026, eight days after the Cerebras announcement, and 120% above the 30 March 2026 low of $1.86; over 252 sessions the price rose 59.1% while trailing revenue for each diluted share fell 60.0% and the diluted share count rose 133.4%.
Priced against its rivals
Only Applied Digital sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Also checked and set aside: Digital Realty Trust (a substitute, not the same product); Equinix (a substitute, not the same product); MARA Holdings (a substitute, not the same product).
Private or foreign rivals that cannot be priced: Bitfarms Ltd., Argo Blockchain Plc.
The bet: what it pays if it works
This is a bet on a landlord filling a second building. If the Cerebras hall opens on time, the loan is signed and a second tenant takes a hall of the same size, the business could be worth about four times today's market value in two to three years, on a generous reading of the leases.
If it fails, little is left: the cash is going into the building, a loan would be paid before shareholders, and Cerebras may walk away if the hall is late.
| Revenue in two to three years | Contracted megawatts needed | At the stated multiple |
|---|---|---|
| $200.00M (the big win) | about 80 at 100% kept | 5.1× |
| $300.00M | about 123 at 100% kept | 7.6× |
| $415.00M (market forecast) | about 172 at 100% kept | 10.6× |
JLL's outlook implies about 19 GW built for lease in the US over 2027-29; at 0.75%, the power Digi Power X holds or plans, it leases 140 MW plus 10 MW of GPUs, about $415 million. On that forecast, $415.00M pays 10.6× from today's value: a Cheap bet on the market case.
To pay 2× (a Fair bet) it would need about $78.59M of revenue (about 28 contracted megawatts); to pay 5× (a Cheap bet), about $196.47M of revenue (about 79 contracted megawatts), at the same multiple.
The steps it has to take
- Done Ten-year take-or-pay agreement with Cerebras for about 40 MW at Columbiana
- Done First modular pod live and GPU rental billing
- In progress Q3 2026 revenue at least double Q2's, as guided due 2026-11-12
- In progress Phase 2 project loan signed as debt, amount and rate disclosed due 2026-12
- In progress Phase 1's 15 MW ready for service for Cerebras due 2026-12-15
- Slipped Share count stops rising: no at-the-market draw while the build is funded due 2027-03
- In progress Phase 2's 25 MW ready for service due 2027-03
- Not started A second AI colocation tenant signed for any site due 2027-12
- Not started Electricity below a third of the fee through a full year of operation due 2027-12
The detail behind the label
Rating
Cheap
the big win's payoff against the 2× and 5× lines
Market case
10.6×
a cheap bet if the market forecast holds
The evidence under this - 7 claims
C04facthigh confidence
On 4 May 2026 the company signed a ten-year colocation and master services agreement with Cerebras Systems for about 40 MW at Columbiana, Alabama: an exclusive licence to the whole facility, Phase 1 of 15 MW ready for service targeted 15 December 2026, Phase 2 of 25 MW targeted by the end of Q1 2027 and conditioned on financing, about $1.1B of contract value in the initial term and $2.5B with a seven-year extension.
C25management claimmedium confidence
Management targets an annualised revenue run-rate of $250M to $300M by Q3 2027: about $140M contracted, AI colocation of $80M to $100M in fiscal 2027 from Cerebras with 90 MW of colocation targeted in total, GPU rental scaling to 10 MW for a year-end run-rate of up to $100M, energy sales of about $12M; and Q3 2026 revenue is guided to more than double Q2's.
sourceQ2 2026 results release, Exhibit 99.1 to the 8-K of 14…primaryOperations and financial update, Exhibit 99.1 to the 8-K of…primaryQ1 2026 results release, Exhibit 99.1 to the 8-K of 15 May…primaryQ2 2026 earnings call transcriptprimary
against this
- The contracted piece is one agreement whose second phase is conditioned on financing not yet raised (C27), and the 50 MW and 10 MW beyond it have no signed customer.
- The GPU run-rate of $100M on 10 MW implies about $10M of revenue for each megawatt against the $1.08M earned in five weeks on 0.6 MW, and the fleet to reach it would cost several times the $48.3M deployed so far (C14, C15).
- The company guided $40M of capital spending for fiscal 2026 in March and reported about $110M deployed by August (C28).
C29factmedium confidence
The 10-K's properties item lists 55 MW available at the Alabama site and 141.7 MW at the New York sites, 196.7 MW in total; the FY2025 results release describes Alabama as '70MW approved' and a '400-megawatt' pipeline including 200 MW of future North Carolina development.
sourceForm 10-K for the fiscal year ended 31 December 2025primaryFiscal 2025 results release, Exhibit 99.1 to the 8-K of 31…primary
against this
The two documents were filed the same day and give different Alabama figures; the 10-K is the signed one and is what this thesis carries.
C36factmedium confidence
CBRE's first-half 2026 North America survey puts primary-market vacancy at a record low 1.4%, under-construction capacity at 7,481.1 MW after 24.8% growth in the half, 80.4% of that already committed against 74.3% a year earlier, and under 1,500 MW still available, about six months of demand.
C23facthigh confidence
At 30 June 2026 the company held $128.1M of cash and $14.3M of bitcoin and ether, no debt, $279.6M of total assets and $265.0M of equity; the release describes the $142.4M total as 'cash and cash equivalents'. Warrant liabilities were $4.25M on 1.08 million warrants struck at $2.00 to $3.66.
C27facthigh confidence
The Q2 2026 10-Q states the company expects to require additional financing, including project-level debt, to complete the campus; that full deployment of Phase 2 is conditioned on securing adequate financing; and that if it cannot, it may have to delay, curtail or abandon development plans, 'including our ability to satisfy our obligations under our AI colocation agreement'.
C09facthigh confidence
If Phase 1 misses its date the company pays Cerebras daily delay credits as a redacted share of the monthly base fee after a cure period; if a final outside date is missed Cerebras may terminate without penalty and recover unapplied prepaid fees and non-recurring charges; the agreement also calls for a letter of credit, amount redacted.
Where we disagree with the market
The market believes
The $1.1B contract makes this an AI landlord worth paying up for; the one analyst covering it says buy.
We believe
The contract is real and the building will probably be finished. The shareholder's slice of it is what keeps shrinking.
Twice in a year the same pattern: an announcement lifted the shares, the company sold stock into the rally, and the price fell back. After the Cerebras deal the shares hit $9.20 in May and closed August at $3.60, the contract intact and more shares out.
Against us: the chief executive and the president bought shares in August, and a signed project loan would change the funding story.
What analysts say, and the evidence
Analysts positive
100%
of 1, 1 Sep
Four months earlier
100%
of 2, 1 May
The evidence under this - 7 claims
C45facthigh confidence
One analyst rates the shares, Buy, down from three in December 2025; the Q2 2026 call's question session consisted of questions shareholders had submitted, read by the operator, with no sell-side analyst on the line; FINRA short interest was 5.78 million shares, 6.95% of the float, at the 31 August 2026 settlement.
C53facthigh confidence
Monthly closes: $2.29 in September 2025, $6.03 in October 2025, $2.55 in December 2025, $2.03 in March 2026, $7.81 in May 2026, $3.60 in August 2026; the ATM programme was upsized to $200M in November 2025 and the share count rose 110% during 2025.
C22facthigh confidence
The shares closed at $4.09 on 18 September 2026, 55.5% below the 52-week high of $9.20 set on 13 May 2026, eight days after the Cerebras announcement, and 120% above the 30 March 2026 low of $1.86; over 252 sessions the price rose 59.1% while trailing revenue for each diluted share fell 60.0% and the diluted share count rose 133.4%.
C20facthigh confidence
The at-the-market programme sold 27.95 million shares for $163.2M in the first half of 2026, about $5.84 a share, and 2.85 million shares for $11.26M after 30 June, about $3.95 a share; the US programme was upsized to $175M on 8 May 2026, so about $174.5M of it is used, at a commission of up to 3%.
C19facthigh confidence
Subordinate voting shares outstanding rose from 33.0 million at 31 December 2024 to 69.4 million at 31 December 2025 and 98.5 million at 30 June 2026, with 2.85 million more issued after the quarter; 3,333 proportionate voting shares convert into 666,600 more. Weighted diluted shares were 85.5 million in Q2 2026 against 36.6 million in Q2 2025.
C43facthigh confidence
The chief executive and the president bought 20,000 and 10,000 shares on the open market on 19 and 20 August 2026 at $3.60 and $3.86, discretionary; the president sold 137,500 shares from January to May 2026 under a Rule 10b5-1 plan at $2.25 to $3.56. The chief executive is the president's father; a director, Ajay Gupta, is part-owner of the West Virginia power station under a letter of intent with the company.
C26management claimmedium confidence
Management reports Phase 1 on schedule for 15 December 2026, all long-lead equipment secured and arriving, the dedicated substation complete with grid interconnection finalised and a power delivery agreement with Alabama Power in place, Phase 2 equipment due in November and December, and that it is in advanced discussions with lenders with Goldman Sachs engaged to syndicate the financing.
sourceOperations and financial update, Exhibit 99.1 to the 8-K of…primaryOperations and financial update, Exhibit 99.1 to the 8-K of…primaryQ2 2026 results release, Exhibit 99.1 to the 8-K of 14…primaryQ2 2026 earnings call transcriptprimary
against this
- The same 10-Q states that financing 'may not be available on acceptable terms or at all' and that without it the company may be unable to satisfy the Cerebras agreement (C27).
- The company's delivery record for a Tier III hall is one 1 MW modular pod live since May 2026; the 10-K lists 17 employees.
What could go wrong, and how we would know
The risks
- One tenant, one building. Cerebras is all the contracted AI revenue, and Cerebras itself gets most of its own revenue from two customers.
- A late opening. Miss the December date and Digi Power X owes delay credits; miss the final deadline and Cerebras can walk away.
- Paying for the second phase. The filing says more financing is needed, and without it the company may not meet its obligations to Cerebras.
- GPUs that do not pay. The GPU fleet loses about $16.1M a year to depreciation against the roughly $9.8M its contract is expected to bill.
The evidence under this - 5 claims
C04facthigh confidence
On 4 May 2026 the company signed a ten-year colocation and master services agreement with Cerebras Systems for about 40 MW at Columbiana, Alabama: an exclusive licence to the whole facility, Phase 1 of 15 MW ready for service targeted 15 December 2026, Phase 2 of 25 MW targeted by the end of Q1 2027 and conditioned on financing, about $1.1B of contract value in the initial term and $2.5B with a seven-year extension.
C11facthigh confidence
Cerebras has been listed on Nasdaq since May 2026. Its June 2026 10-Q carries $690.3M of fixed data-centre and office lease obligations, further non-cancellable data-centre leases signed in Q2 and Q3 2026 with 2026 commencement dates, and two customers at 34% and 32% of Q2 revenue.
C09facthigh confidence
If Phase 1 misses its date the company pays Cerebras daily delay credits as a redacted share of the monthly base fee after a cure period; if a final outside date is missed Cerebras may terminate without penalty and recover unapplied prepaid fees and non-recurring charges; the agreement also calls for a letter of credit, amount redacted.
C27facthigh confidence
The Q2 2026 10-Q states the company expects to require additional financing, including project-level debt, to complete the campus; that full deployment of Phase 2 is conditioned on securing adequate financing; and that if it cannot, it may have to delay, curtail or abandon development plans, 'including our ability to satisfy our obligations under our AI colocation agreement'.
C15estimatemedium confidence
Straight-line, $48.3M of GPU hardware over three years is about $16.1M a year of depreciation against a contract expected to bill about $9.8M a year, so the GPU business as contracted does not cover its own depreciation, before electricity.
derivedC13 and C14: $48.3M ÷ 3 = $16.1M; $19.6M ÷ 2 = $9.8M.
against this
- Management targets 10 MW and up to a $100M annualised run-rate by end-2027 and says NVIDIA and several banks now finance GPUs against residual value, so a second customer or higher utilisation could close the gap (C25).
- Depreciation over three years is the company's own choice; a longer economic life would lower the annual charge, though the useful-life policy is what the filing states.
What we still do not know
- How large Cerebras's upfront charges and prepayments are. They are redacted, and could make the shareholder's share much better than this reading.
- Whether the New York sites, which cannot add power under the state's pause, find an AI tenant in 2027.
The evidence under this - 3 claims
C10facthigh confidence
Cerebras pays one-time non-recurring charges for each kilowatt of the Phase 1 and Phase 2 build-outs and prepays a portion of the monthly fee; the amounts are redacted under Item 601(b)(10)(iv). At 30 June 2026 the only customer prepayment on the balance sheet was $2.51M of deferred lease income from the GPU customer.
C30factmedium confidence
On 14 July 2026 New York's governor signed an executive order pausing discretionary state environmental permits for new hyperscale data centres for up to a year; the company's 10-Q describes it as barring new centres using 50 MW or more, and its chief executive says the two New York sites are grandfathered, using about 60 MW and 18 MW, and cannot expand their power.
sourceGovernor of New York - First statewide moratorium on new…primaryForm 10-Q for the quarter ended 30 June 2026primaryQ2 2026 earnings call transcriptprimary
against this
Whether converting an existing permitted mining site to an AI hall needs a new discretionary permit is not addressed by the order's announcement or by the company; the conversion is targeted only for late 2027 (C31).
C31management claimlow confidence
Management targets converting the New York sites to AI operations beginning in Q3 and Q4 2027, aiming for a 40 to 50 MW colocation deal and 8 to 10 MW of GPU rental there.
sourceQ2 2026 results release, Exhibit 99.1 to the 8-K of 14…primaryQ2 2026 earnings call transcriptprimary
against this
No New York customer is named or signed; the FY2025 release's '60 MW hydro' allocation could not be found in the New York Power Authority's award releases and is carried as the company's statement.
What would change our view
- Unattractive→NeutralPhase 2 is financed with debt, not with shares
It needs all of:
- ○The first phase opens on time and the second phase's loan closes as project debt, with no share sales paying for the build.watched as it happens
- ○The share count stops rising: no more shares sold while the build is being paid for.checked at the next results, due by 12 Nov
- Unattractive→AttractiveA second tenant, and the economics hold at the meter
It needs all of:
- ○A second AI tenant signs for any site, so the case stops being one customer in one hall.watched as it happens
- ○Electricity for the Cerebras hall stays below a third of its fee through a full year, with the fee still covering power.checked at the next results, due by 12 Nov
We would also be wrong if
- The first phase is not open by 31 March 2027, or Cerebras ends the agreement.
- GPU rental still earns less than the fleet's depreciation through 2027.
What is coming
- 12 November 2026 Q3 2026 results: Whether revenue at least doubles Q2's as guided, the Alabama project loan is signed with terms, and the quarter was funded without more share sales.
Every dated event ahead
- 12 November 2026 Q3 2026 results: Whether revenue at least doubles Q2's as guided, the Alabama project loan is signed with terms, and the quarter was funded without more share sales.
- 15 December 2026 Alabama Phase 1 ready for service (15 MW for Cerebras): Whether the first contracted hall is delivered on date and starts billing, or delay credits and the termination clock begin.
- March 2027 NVIDIA Vera Rubin systems delivered: Whether the $35M GPU order arrives and finds a renter on terms that cover depreciation, unlike the first contract.
- March 2027 Alabama Phase 2 (25 MW) targeted complete: Whether financing closed and the larger part of the Cerebras fee bills, or the phase slips for want of a loan.
- July 2027 New York data-centre permit pause lapses at the latest: Whether the New York sites can add power for the planned AI conversion or stay capped at today's load.
Since we wrote this
Written
19 Sep
Price the thesis read
$4.09
18 Sep
Latest close
$3.19
close, · -22.0% since
- 13 OctNewsDigi Power X has a $200M Alabama loan commitment, not a signed loan. View held$200M Alabama debt financing commitment letter.
- 9 OctBet moveBet re-struck: Fair bet to Cheap betRe-priced at the 8 October close.
- 5 OctThesis reviewThe bet now names what it ridesThe owner asked that every bet name the macro trend behind it, after BWXT's bet was missing its chief executive's case for nuclear over gas.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the 10-K/A and filings.
- 19 SepThesis writtenUnattractive, medium convictionWritten a month after the June-quarter results, three months before the Alabama hall is due to open, with the shares 55% below May's high.
Also checked 3 times with nothing new to act on.
Sources 35
Where this came from
Sources - 35
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-31Item 1 business and competition, Item 2 power available (196.7 MW), risk factors, the going-concern and functional-currency notes, the FY2025 revenue split, share counts at 2024 and 2025 year-ends, share-based pay, the remediated material weaknessesbacksC01C18C19C29C32C41C44C46C47C53C64C66
- S02primarycompany filing2026-04-30directors and officers, the father-son relationship, Ajay Gupta's background, beneficial ownership, salaries partly paid in bitcoinbacksC43C62C63C64C65
- S03primarycompany filing2026-08-14the statements, the four-segment note, the Cerebras commitment note with the $195 rate and 3% escalator, the lessor note on the usage-based GPU contract, the $48.3M of leased hardware and its three-year life, the USDC deconsolidation, the ATM issuance and the post-quarter sales, the warrant table, the financing risk factor, the New York executive orderbacksC02C03C04C05C10C13C14C16C18C19C20C21C22C23C24C27C30C42C44C47C53C66
- S04primarycompany release2026-08-14the adjusted EBITDA reconciliation and definition, the '$142.4 million cash' description, the 2027 outlook, the Alabama, New York, North Carolina and West Virginia updates, the USDC valuation statementbacksC02C16C23C25C26C28C31C42C51
- S05primarytranscript2026-08-14the chief executive's ATM price statement, the New York grandfathering and power figures, the Gupta relationship on the West Virginia letter of intent, the USDC raise, Goldman Sachs's engagement; the questions were shareholder-submitted and read by the operator, a different origin from the answers
we are grandfathered in New York. We cannot expand our current footprint of power. So I think we are using 60 megawatts in North Tonawanda and we are using 18 megawatts in Buffalo. So we are allowed to use the same power. We are not allowed for now to expand power.
backsC21C25C26C30C31C42C43C45 - S06primarycompany filing2026-05-08the summary terms: 40 MW, ten years, exclusive licence, the two phases and their dates, the financing condition, the one-time payments and prepaid fee, the $1.1B and $2.5B figuresbacksC04C10
- S07primarycompany filing2026-05-08the fee basis 'per kW per month (all-in, including delivered power, excluding applicable taxes)', the take-or-pay clause, the daily delay credits, the final-outside-date termination right with refund of unapplied prepaid fees and NRCs, the liquidated-damages clause, the letter of credit, the Phase 2 financing approval mechanism, the lender recognition provisionsbacksC04C05C09C10
- S08primarycompany release2026-05-05the substation-complete and Alabama Power delivery-agreement statements, the self-funding of Phase 1, Hans Vestberg as senior advisorread, but no claim rests on it
- S09primarycompany release2026-04-20the 24-month term, the $19.6M expected value, the $2.95M upfront payment, the facility description (Rated 3, N+1 UPS, CDU and chiller two-loop cooling), the 4,000-GPU capacity claimbacksC13C40
- S10primarycompany release2026-06-03the $35M Vera Rubin commitment, cash of about $150M and $65M deployed at 3 June, the substation and interconnection statementsbacksC24C26
- S11primarycompany release2026-07-07the 2027 outlook by segment, cash of about $155M and $95M deployed at 3 July, the ARMS 200 pod live since 15 May 2026backsC25C26C51
- S12primarycompany release2026-05-15the first statement of the 2027 outlook, the May 2026 option and RSU grants, Q1 adjusted EBITDA and share-based paybacksC25C44
- S13primarycompany release2026-03-31the $40M fiscal 2026 capex guide, the '70MW approved' Alabama and '400MW pipeline' descriptions, the 60 MW hydro claim, the FY2025 adjusted EBITDA table with its foreign-exchange add-backbacksC28C29
- S14primarycompany filing2026-05-08the $175M programme size, $72.4M sold by 8 May under the first $75M, the 3% commission, the $6.19 share price that daybacksC20
- S15secondaryvendor data2026-09-19Research pack, 19 September 2026 (FMP market tier; FINRA short interest; price series from FMP historical-price-eod)price, the 52-week range and its dates, the 252-day decomposition, the analyst panel and estimates, short interest, the measured news reactions, revenue per employeebacksC22C41C45C50C53
- S16primarycompany filing2026-08-21two discretionary purchases in August 2026 and six planned sales by the president from January to May 2026backsC43
- S17primarycompany filing2026-05-14the buyer's own account of leasing third-party halls in California, Oklahoma and Canada, why retrofits are worse than purpose-built space, and the 750 MW OpenAI deploymentbacksC12
- S18primarycompany filing2026-08-12$690.3M of fixed lease obligations, further leases signed in Q2 and Q3 2026 not yet commenced, customer concentration at 34% and 32%; no mention of this landlordbacksC11
- S19primarycompany filing2026-03-02the capacity ladder (1,426 / 920 / 590 / 120 MW), colocation revenue of $65.4M, the conversion planbacksC33
- S20primarycompany filing2026-02-27522 MW contracted, the Fluidstack and Core42 leases, Google credit support, ten- to twenty-five-year termsbacksC34
- S21primarycompany filing2026-07-29the 150 MW standard design in 14 to 18 months, hyperscaler qualification, long-term lease and hosting arrangementsbacksC35
- S22secondaryindustry data2026-09-19vacancy, under-construction capacity, the pre-committed share and the available inventory, measured outside the company
primary market vacancy fell to a record low of 1.4% in H1 from 1.6% in H1 2025 … Total under-construction capacity across primary markets increased by 24.8% in H1 to a record high of 7,481.1 MW … Preleasing activity accelerated with commitments made on 80.4% of all under-construction capacity, compared with 74.3% a year ago … Less than 1,500 MW of future capacity across all primary markets remains available, representing approximately six months of demand
backsC36 - S23secondaryindustry data2026-04-07Synergy Research Group - Hyperscale operators to account for 67% of all data center capacity by 2031 Synergy Research Groupthe own-built share of the buyer class, and colocation's growth rate
they now account for 48% of the worldwide capacity of all data centers. Almost 60% of that hyperscale capacity is now in own-built, owned data centers with the balance being in leased facilities … Looking ahead to 2031, hyperscale operators will account for 67% of all capacity … colocation capacity will continue to increase each year at near double-digit rates
backsC37 - S24primarygovernment data2026-09-19Alabama's average industrial price, 7.84 cents a kilowatt-hour year-to-date June 2026 against 7.69 a year earlier, the basis for netting power out of the all-in fee
Table 5.6.B. Average Price of Electricity to Ultimate Customers by End-Use Sector, by State, Year-to-Date through June 2026 and 2025 (Cents per Kilowatthour) … Alabama 16.58 15.98 14.79 14.46 7.84 7.69
backsC07 - S25primarygovernment data2026-09-19the rate of the driver, measured by a statistical agency
Across all cases, servers alone accounted for an estimated 7% of commercial sector electricity consumption in 2025. Data center server electricity use grows to 22%-33% of commercial building electricity use by 2050 across our cases.
backsC38 - S26primaryindustry data2026-09-19Uptime Institute - Tier Classification System Uptime Institutewhat the Tier III label in the agreement actually requires
A Tier III data center is concurrently maintainable with redundant components as a key differentiator, with redundant distribution paths to serve the critical environment. Unlike Tier I and Tier II, these facilities require no shutdowns when equipment needs maintenance or replacement.
backsC39 - S27primaryother2026-09-19Cerebras - CS-3 vs. Nvidia B200: 2024 AI accelerators compared (vendor technical page) Cerebras Systemsthe per-system power draw the hall's cooling is sized for
The CS-3 is a 15U server consuming up to 23kW of power. … The CS-3 consumes 23kW peak while the DGX B200 consumes 14.3 kW.
backsC40 - S28primaryregulator2026-07-14Governor of New York - First statewide moratorium on new hyperscale data centers launched by Governor Kathy Hochul (Executive Order, 14 July 2026) New York State, Office of the Governorthe state action that freezes new large data centres in New York, where 141.7 MW of the company's power sits
The Governor is temporarily pausing State environmental permits for up to one year in order to build a nation-leading regulatory framework that protects ratepayers, the environment, the energy grid and communities across the state. … During the development of this GEIS, which will take up to a year, a moratorium will be in place and the Department of Environmental Conservation (DEC) will not issue any discretionary permits not already deemed complete.
backsC30 - S29primaryindustry data2026-08-11a broker's North American absorption, the capacity under construction and its owner-occupied part, the tenant mix, the frontier markets' share of the pipeline and the size of an enterprise requirement; read through ir_fetch
With vacancy sustained at 1% for the third consecutive year despite unprecedented construction activity, North America now has 66 GW under construction, 95% of which is pre-committed. … Hyperscalers remain the dominant force, accounting for 59% of 2026 data center tenant demand while meeting capacity needs through both leasing and self-building, with 28 GW of owner-occupied capacity currently under construction. … Individual enterprise requirements typically range from 500 kW to 3 MW
backsC54 - S30primaryindustry data2026-01-05a broker's forecast of global capacity to 2030, the Americas' share and growth rate, the US share of the Americas, and the construction cost a megawatt; read through ir_fetch
The data center sector is projected to increase by 97 GW between 2025 and 2030, effectively doubling in size over a five-year period. By 2030, global data center capacity could reach 200 GW. … The Americas is the largest data center region , representing about 50% of global capacity. The Americas also has the fastest growth rate of the three global regions, with a projected 17% supply CAGR through to 2030 … Between 2020 and 2025, the average global data center construction cost increased from $7.7 to $10.7 million per MW
backsC55 - S31primaryindustry data2026-04-02Synergy Research Group press release - Neocloud Market Forecast to Approach $400B by 2031, Driven by Surging AI Infrastructure Demand Synergy Research Groupan independent market tracker's 2025 GPU-rental (neocloud) revenue and its forecast to 2031, naming transitioning crypto infrastructure providers in the long tail; read through ir_fetch
New data from Synergy Research Group reveals that neocloud revenues are scaling at an unprecedented pace, reaching $9 billion in Q4-up 223% year-over-year-and exceeding $25 billion for full-year 2025. Driven by surging demand for AI infrastructure, Synergy forecasts the market will approach $400 billion by 2031, representing a sustained 58% compound annual growth rate.
backsC56 - S32primaryindustry data2025-12a second analyst firm's 2025 base and 2030 forecast for GPU rental by neoclouds, on a different definition from Synergy's; read through ir_fetch
ABI Research expects that by 2030, global revenue from GPUaaS offerings by neocloud providers are projected to reach nearly US$250 billion, at a Compound Annual Growth Rate (CAGR) of 43% (from US$42 in 2025).
backsC57 - S33primarycompany filing2026-08-11the largest listed GPU-rental company's quarterly revenue, active and contracted power and revenue backlog: the revenue a megawatt of rented GPUs earns; read through filing_fetchbacksC58
- S34primarycompany filing2026-07-28590 MW leased to CoreWeave with 395 MW billing, and the 27 July 2026 leases of 377 MW to AMD and 152 MW to a neocloud, fifteen-year terms, with AMD's right to reserve up to 1,925 MW more; read through filing_fetchbacksC59
- S35primarytranscript2026-08-14the chief executive's timing and size for North Carolina, the West Virginia growth path and the capital intensity of GPUs; read through transcript_fetch (FMP), the shareholder-submitted questions read by the operator
So we own 2 lands over there, about 40 acres. We acquired within the last 12 months, an additional adjacent land so we can properly design and build an adequate data center there. We are in the process with Duke Energy and the zoning to get all the necessary load studies, permits for a major data center. And we believe that we will be able to utilize that asset towards 2029, 2030 with an additional 150 to 200 megawatts of power.
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