For years, technology has been putting development on steroids. Growing at a rapid scale, the internet, cloud, mobile, e-commerce, and now artificial intelligence (AI) have been changing the way we learn, work, and consume content. Such disruptions are difficult to value as they grow exponentially after every phase. Technology keeps upgrading, creating a consistent source of revenue for companies that power the tech or catch up to the trend.
Several artificial intelligence stocks trade near their highs
Several AI hardware stocks dipped between February and April 2025 as Trump tariff uncertainty slowed AI investment. They have now recovered. Among the names are Nvidia, Advanced Micro Devices, Broadcom, and Celestica. They make graphics processing units (GPUs), application-specific integrated circuits (ASICs), and networking units for AI data centres.
However, the next step in the AI revolution is users of this AI hardware. Some of these companies are still investing in AI infrastructure and will see the returns in the coming months. Hence, their stocks are trading at a lower valuation than their future growth potential.
This artificial intelligence stock is down 57%
One such company is Hive Digital Technologies (TSXV:HIVE). You know this company for its Bitcoin mining, from which it earns 90% revenue. However, it made a move to AI and high-performance computing (HPC) infrastructure a few years back. This segment is fast-growing. In FY25 alone, revenue from AI/HPC surged 300% to US$10.1 million. Hive has named this segment BUZZ HPC business.
BUZZ HPC segment is a vertical integration of Hive’s Nvidia graphics processing unit (GPU)-powered data centres that mine Bitcoin. It is aggressively expanding its capacity on the back of strong demand.
HIVE acquired a 7.2-megawatt (MW) facility in Toronto to support its HBC infrastructure and accelerate the development of a sovereign Canadian AI ecosystem. However, the biggest expansion is happening in Paraguay, where it is building a 300-MW capacity. It is expected to be completed by December 2025.
The first phase of 100 MW became operational in Paraguay, increasing its Bitcoin mining hashrate from six Exahash per second (EH/s) to 11.5 EH/s in June 2025. At this capacity, it is mining 5.5 BTC daily. It aims to reach 25 EH/s by December 2025, mining 12.5 BTC daily. Hive is also acquiring Bitfarms’s 200-MW hydro-powered Bitcoin mining facility in Paraguay to reach the 25 EH/s goal.
Despite these investments, Hive’s stock continued to trade 57% below its November 2024 high of $7.35, while Bitcoin prices surged 36%. It is because the Bitcoin Halving event on April 20, 2024, reduced Hive’s revenue and gross operating margin to 22% in FY25 from 33% in FY24. However, Hive is increasing its capacity to sustain Bitcoin mining volumes. It will also use the new capacity to expand in the high-margin HPC business to reduce the impact of Bitcoin price volatility on its earnings.
Is Hive a ridiculously cheap stock?
Taking a long-term view of Hive stock, the decelerating Bitcoin mining revenue and exponential growth in HPC could see HPC revenue come on par with the mining revenue in a few years. Long-term investors can invest in Hive for its HPC business, where it is increasing capacity and market share.
Hive is funding its expansion using some of the Bitcoin it mined. The company’s profits will fluctuate with Bitcoin prices. The real value of this company lies in the enterprise value of $500 million, which is below the market capitalization of $492.3 million.
Running at 18 EH/s capacity, Hive expects its revenue to grow fourfold to US$400 million from US$105 million in FY25. It expects its HPC business to grow 10-fold to US$100 million in annual recurring revenue.
Even if Hive takes two to three years to achieve this growth, the stock is trading at an attractive valuation of 2.47 times the price-to-sales ratio. The company’s strong fundamentals can help it sustain a downturn and grow in an upturn.
At $2.23 per share, Hive stock is a buy-and-hold investment, as it can grow to $6 and above during a cyclical upturn.
