Benchmark Dismisses Bitdeer Crash as Overreaction

Bitdeer Technologies Group (NASDAQ:BTDR) took a hit on Monday, crashing over 20% in value. Benchmark analyst Mark Palmer sees this decline as an 'overreaction' and has reiterated the company's Buy rating with a $22 price target.

Benchmark argues that investors are misinterpreting Bitdeer's recent earnings call. The company disclosed a new $1 billion shelf registration, which spooked some investors who worry about dilution. However, Palmer points out that Bitdeer confirmed it intends to use non-dilutive, project-level financing wherever contracted cash flows support it.

Despite the selloff, Bitdeer's Q2 revenue rose 47% year-over-year to $228.8 million, while adjusted EBITDA surged 575% year-over-year to $31.1 million. This growth is largely driven by Bitcoin (BTC) mining efficiency gains.

Benchmark analyst Mark Palmer also highlighted the importance of Bitcoin mining in Bitdeer's AI strategy. He noted that mining not only generates revenue but also funds the infrastructure behind Bitdeer's largest AI deal, a 16-year agreement with Volta Tydal AS worth $4.7 billion. The site was originally built for Bitcoin mining, giving Bitdeer a head start on converting it to an AI lab.

Needham cut its price target to $20 from $22 while maintaining its Buy rating, citing concerns about Bitdeer's pipeline. However, Benchmark remains optimistic about the company's prospects and sees significant upside potential with its current price at around $8.70.