Bitdeer's Uncertain Future: Volatile Bitcoin and Rising Costs Weigh on Stock

Bitdeer Technologies (BTDR) is a company that has been growing rapidly due to its exposure to two significant tailwinds: Bitcoin and AI. However, despite strong revenue growth, the analyst remains bearish on the stock. One reason for this skepticism is the company's high dependence on Bitcoin, which can be volatile.

The analyst notes that BTDR trades at a 26% discount to the sector median on forward P/S, reflecting market hesitation amid crypto dependency and rising costs. Furthermore, the company's gross margin turned negative due to a 65% year-over-year increase in cost of revenue, driven by higher electricity expenses.

On the other hand, AI Cloud revenue surged 10 times but remains a small contributor, with execution risk and fierce competition persisting. The analyst concludes that despite these tailwinds, their conviction on BTDR is not strong enough to warrant a buy recommendation.