Bitfarms is set to significantly expand its operations following its acquisition of Stronghold Digital Mining, a move H.C. Wainwright analyst Mike Colonesse has described as “a transformational acquisition.” This $125 million all-stock deal, announced on August 21, positions Bitfarms to dramatically increase its power capacity and operational footprint by 2025.

Colonesse views this acquisition as a pivotal moment for Bitfarms, expecting the company to nearly triple its total capacity to 955 megawatts (MW) by the end of 2025, up from 310 MW as of the second quarter of 2024. “After the integration and expansion of Stronghold’s assets, Bitfarms will be poised to more than triple total capacity to 955 MW by YE2025, up from 310 MW operating at the end of 2Q24,” the analyst wrote. The finalization of the deal in the first quarter of 2025 will enable Bitfarms to approach 1 gigawatt of power by the end of that year.

In addition to this capacity growth, the acquisition is expected to significantly enhance Bitfarms’ presence in the United States. The deal will increase Bitfarms’ U.S. portfolio from 6% to approximately 47%, with Stronghold’s Pennsylvania sites contributing an additional 23 exahashes per second (EH/s) to Bitfarms’ previously projected growth target of 35 EH/s by the end of 2025.

Given this optimistic outlook, H.C. Wainwright has reiterated its buy rating for Bitfarms (BITF) stock with a price target of $4, representing a 75.4% upside potential from its current trading price of around $2.28. Colonesse highlighted potential risks to achieving this target, including Bitcoin price volatility, operational delays, network hash rate changes, and possible shareholder dilution. Despite these risks, Bitfarms’ recent 22% rise following its Q2 2024 results adds to the positive momentum surrounding the stock.

Source: Bitfarms stock earns analyst praise after ‘transformational’ deal