We came across a bullish thesis on Canaan Inc. (CAN) on Substack by WhiteHatDoc. In this article, we will summarize the bulls’ thesis on CAN. Canaan Inc. (CAN)’s share was trading at $2.25 as of Dec 5th. CAN’s trailing P/E was 4.56 according to Yahoo Finance.
A close up view of a final mining equipment used in bitcoin mining.
Canaan Inc. (CAN) is a key player in the digital gold rush, providing essential hardware for Bitcoin mining operations worldwide. Like the suppliers of tools during the 19th-century gold rush, Canaan offers the critical technology, including its AvalonMiner series, that powers the operations of Bitcoin miners. As the demand for mining hardware surges, driven by an increase in mining difficulty and the need for higher computational power (known as hashrate), Canaan is well-positioned to capitalize on this growth. The company’s hardware is crucial for mining companies seeking to secure more mining rewards, and as these companies expand, so does the need for Canaan’s products.
Recent industry expansions, such as Marathon Digital Holdings’ acquisition of two Bitcoin mining sites for $178.6 million and CleanSpark’s purchase of GRIID Infrastructure, underscore the increasing demand for efficient and cost-effective mining solutions. Riot Platforms has also expanded its power capacity to 2 gigawatts, highlighting the ongoing arms race in the Bitcoin mining sector. Canaan’s hardware, while not leading in raw performance compared to competitors like Bitmain’s Antminer and MicroBT’s Whatsminer, offers a strong value proposition through its competitive pricing, making it especially attractive to cost-conscious miners.
Furthermore, Canaan has secured large purchase agreements with major mining companies. HIVE Digital Technologies, for instance, has ordered 5,000 Avalon A15-194T miners, while Cipher Mining Technologies purchased 6,600 Avalon A1566 miners earlier this year. CleanSpark’s recent purchase of 3,800 Avalon A1566I Immersion Cooling Miners further demonstrates the growing demand for Canaan’s advanced technology. These deals reflect industry confidence in Canaan’s ability to meet the evolving needs of the sector.
As the competition in Bitcoin mining intensifies and mining companies continue to scale up their operations, Canaan stands to benefit from its strategic position in the mining hardware supply chain. With its cost-effective solutions and strong market demand, the company is well-positioned to capitalize on the industry’s expansion.
Canaan Inc. (CAN) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 6 hedge fund portfolios held CAN at the end of the third quarter which was 7 in the previous quarter. While we acknowledge the risk and potential of CAN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CAN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
