NEW YORK - Bit Digital, Inc. (NASDAQ:BTBT), a New York-based high-performance computing (HPC) infrastructure and digital asset production company, has announced the execution of a Master Service Agreement (MSA) with Boosteroid, a global cloud gaming provider. The agreement follows a previously signed binding term sheet on August 19, 2024.
Under the MSA, Bit Digital has placed an initial order of 300 GPUs, projected to generate around $4.6 million in revenue over a five-year period. These GPU-servers, customized for Boosteroid, are based on AMD (NASDAQ:AMD) EPYC 4th Gen CPUs and RX7900XT GPUs, and are provided by ASUSTeK Computer Inc. (ASUS) and AMD. Delivery to U.S. data centers is expected by the end of November 2024, with the potential for Boosteroid to increase their order up to 50,000 servers, which could result in $700 million in revenue for Bit Digital, depending on deployment and market conditions.
Bit Digital's CEO, Sam Tabar, expressed enthusiasm about the partnership and the expected growth opportunity for both companies. He emphasized the company's commitment to quality service in the initial phase, which would set the stage for expansion in 2025.
Boosteroid, currently the world's third-largest cloud gaming provider, operates a GPU-based infrastructure network across 22 data centers, with plans to open 10 more by the end of 2024. The company serves over 5.7 million users in Europe, North America, and South America and has partnerships with major brands like Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Samsung (KS:005930), and others.
Bit Digital, known for its bitcoin mining operations in the US, Canada, and Iceland, has also established a business line, Bit Digital AI, offering infrastructure services for artificial intelligence applications.
Investors are cautioned that investing in Bit Digital's securities involves high risks, as outlined in the "Risk Factors" section of the company's most recent Annual Report. The company's past financial performance does not guarantee future results, and various factors could impact Bit Digital's bitcoin production and overall business operations.
This news article is based on a press release statement from Bit Digital, Inc.
In other recent news, Bit Digital, a blockchain technology company, has seen a significant transformation with the expansion of its graphics processing unit (GPU) business and the acquisition of Enovum Data Centers. B.Riley initiated coverage on Bit Digital's stock with a Buy rating, highlighting the company's growth in the GPU business, which is projected to hit $100 million in the near term. Analyst firm H.C. Wainwright has responded to this acquisition by raising its price target for Bit Digital from $6.00 to $7.00, while maintaining its Buy rating on the stock.
In terms of financial performance, Bit Digital reported a revenue of $29 million for the second quarter of 2024, a 220% increase from the same quarter last year. The company also disclosed unaudited earnings for September 2024, with a revenue of approximately $4.2 million from its AI services. However, Bit Digital's cryptocurrency mining efforts saw a slight decrease, with 51.5 bitcoins produced, marking a 3.6% decrease from August.
Furthermore, Bit Digital has made key executive appointments, including Benjamin Lamson as Head of Revenue and Tom Sanfilippo as Chief Technology Officer, to bolster its high-performance computing business. The company has also entered into a five-year agreement with Boosteroid, a cloud-based gaming provider, which is expected to generate $2.6 million annually. These are the recent developments in Bit Digital's operations.
InvestingPro Insights
Bit Digital's recent agreement with Boosteroid aligns well with the company's growth trajectory, as highlighted by several InvestingPro metrics and tips. According to InvestingPro data, Bit Digital's revenue growth stands at an impressive 153.87% over the last twelve months as of Q2 2024, with quarterly revenue growth reaching 220.34% in Q2 2024. This robust growth is consistent with the company's expansion into GPU-based infrastructure services.
An InvestingPro Tip indicates that analysts anticipate sales growth in the current year, which is in line with the potential revenue boost from the Boosteroid deal. Additionally, another InvestingPro Tip suggests that net income is expected to grow this year, potentially reflecting the positive impact of this new partnership.
Despite the recent 17.4% price drop over the last week, Bit Digital has shown strong performance over longer periods, with a 61.82% price return over the past six months and a 53.45% return over the last year. This volatility is captured in an InvestingPro Tip that notes the stock's price movements are quite volatile.
For investors seeking a deeper understanding of Bit Digital's financial health and growth prospects, InvestingPro offers 16 additional tips, providing a comprehensive analysis to support investment decisions.
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