Bitfarms Stock Soars 143% in 6 Months: What Should Investors Do?

Bitfarms’ BITF shares have skyrocketed 143% over the past six months. It has surpassed the industry’s 24.3% rally and the 18.9% rise in the Zacks S&P 500 Composite.6-Month Share Price Performance Image Source: Zacks Investment Research Is BITF’s impressive growth a subject to buy the stock, or is it time for investors to book their profits? Let us find out.BITF’s Top-Line Outlook Strong, Bottom-Line View WeakThe Zacks Consensus Estimate for Bitfarms' 2025 revenues is pinned at $314.5 million, implying a 63.1% year-over-year surge.Over the past 60 days, one bottom-line estimate for 2025 has been revised downward with no upward revision.In the past 60 days, the consensus mark for 2025 loss per share has widened from 13 cents to 15 cents, whereas the company incurred a loss of 14 cents in the year-ago quarter. These downward revisions highlight a lack of analyst confidence. Image Source: Zacks Investment Research BITF’s Plan to Pivot to HPC/AI is not a Light TrekBitfarms’ move to High-Performance Computing and AI from the Bitcoin pureplay will be met with several hindrances. The pace of market power demand can no longer be met, resulting in higher capital and operational costs for net data center projects. This raises margin pressure, demanding larger upfront investments and higher expenses, delaying profitability.During the third-quarter 2025 earnings call, management stated that the supply of computer chips is expected to surpass growth in data center infrastructure. This reduces BITF’s ability to deploy GPUs at scale swiftly, lowering revenue growth.The risks of data centers becoming incompatible in the next generation lingers. This is evident from the fact that the energy density of the VR series is climbing from 190 kW per rack with the GB300s to 370 kW with the VR200s. The obsolescence of such technology results in extra CapEx and execution risks.Despite Bitfarms’ strong balance sheet position, the transition to HPC/AI is a capital-intensive project, as evidenced by the private debt facility for up to $300 million from Macquarie secured by the company. This heightens financial risks if the capital market tightens or assets deployed do not meet expectations, affecting liquidity.On the competition front, Marathon Digital MARA and Riot Platforms RIOT diversified into the AI/HPC market post Bitcoin Halving in April 2024. Hence, there is no first-mover advantage for Bitfarms. Marathon Digital and Riot Platforms can leverage their higher market capitalization to scale their operations more efficiently than Bitfarms. Winning the high-margin and long-duration contracts with tech giants will result in Marathon Digital and Riot Platforms stripping away demand from BITF.Therefore, moving toward the HPC/AI business is a capital-intensive challenge that is flooded with uncertainty, and companies that are already sitting at the top of the market.Bitfarms’ Stock Looks ExpensiveBITF’s trailing 12-month EV-to-EBITDA ratio is 103.1 times, way above the industry average of 15.8 times. The stock appears sharply overvalued, which is a red flag for investors. If the growth expectations are not met, the valuation may take a nosedive. A large correction can potentially strip away market value. Image Source: Zacks Investment Research Selling Bitfarms Is the Best OptionWe have significant reservations regarding BITF’s investment prospects. Despite a healthy top-line outlook, the bottom-line view does not appear convincing. Analysts’ pessimism is concerning as well. Although pivoting to HPC/AI from the volatility of Bitcoin appears sound, it will be met with challenges that may strip away the company’s competitive position within the market.Most importantly, the current overvaluation waves a massive red flag, compelling us to recommend potential buyers to stay away from this stock, and investors who hold this stock now must sell and book their profits.BITF carries a Zacks Rank #4 (Sell) at present.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marathon Digital Holdings, Inc. (MARA): Free Stock Analysis Report Riot Platforms, Inc. (RIOT): Free Stock Analysis Report Bitfarms Ltd. (BITF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks