DGXX · Digi Power X
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $3.20
Note written ·
Price against the kill line
28.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $3.20, on record since 11 November 2026. The shares are down 41.2% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $3.20, over the 50-day average of closes, which would show the shares leading the S&P 500 again. Phase 1 of the Alabama campus entering service in December 2026 with the $200 million financing closed would also show it.
Research onlyNot in the portfolio.
Last catalyst
Key figures from the filings · Financials
Quarter to 30 September 2026, filed 13 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 12.2
- Revenue, change on a year (%)
- +50.3
- Gross margin (%)
- −19.7
- Free cash flow, four quarters ($M)
- −166
- Net cash, cash less debt ($M)
- 95.2
- Enterprise value to sales (×)
- 4.0
- Free-cash-flow yield (%)
- −71.7
All filed numbers
What Digi Power X reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) |
|---|---|---|---|
| first filed | 12.2 | +50.3 | −19.7 |
| first filed | 6.6 | −18.3 | −83.3 |
| first filed | 6.8 | −26.8 | −11.8 |
| first filed | 8.7 | — | −8.7 |
| first filed | 8.1 | — | −10.5 |
| first filed | 8.1 | — | −1.1 |
| Pre-tax income ($M) | Not reported |
| Net income ($M) four quarters: −35.1 | 1.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +128.9 |
| Operating cash flow ($M) | −6.0 |
| Capital spending ($M) | 160 |
| Free cash flow ($M) | −166 |
| Cash and short-term investments ($M) | 95.2 |
| Debt ($M) | None reported |
| Net cash, cash less debt ($M) no debt reported | 95.2 |
| Deferred revenue ($M) | 13.4 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) at 31 December 2025, filed 31 March 2026 | 1.1 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) including non-controlling interests | 280 |
| Market value ($M) | 231 |
| Enterprise value, market value plus net debt ($M) no debt reported | 136 |
| Enterprise value to sales (×) no debt reported | 4.0 |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 0.8 |
| Free-cash-flow yield (%) | −71.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.1% of shares outstanding sold short, 1.9 days of average trading to cover, −16.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $166K | $0 |
| 12 monthsfrom | $166K | $383K |
The thesis
Digi Power X's shift from bitcoin mining to artificial-intelligence (AI) data center hosting is more likely to lag the S&P 500 than lead it over the next three months. Phase 1 of its Alabama campus has to enter service in December 2026, and the $200 million project debt has to close within the 90 days after the 13 October 2026 commitment letter, for the roughly $1.1 billion, 10-year colocation contract to turn into revenue.
The shares closed at $2.21 on 12 November 2026, down 44.3% over three months from $3.97 on 14 August 2026, and 76.0% below the 52-week intraday high of $9.20 set on 13 May 2026. The market is pricing in doubt about delivery and funding: Jones Trading's Buy-rated $8.00 target, set when it initiated coverage on 28 September 2026, sits far above the share price. The company reports third-quarter 2026 results and an operations update on 13 November 2026, with a call at 8:30 a.m. Eastern.
Bullish and bearish views on Digi Power X Inc. Subordinate Voting Shares
The bull case on Digi Power X Inc. Subordinate Voting Shares (DGXX), in brief: funding gap partly addressed. The bear case: the financing is not closed.
Bull case
- Funding gap partly addressed. On 13 October 2026 the company announced a commitment letter for $200 million of project-level debt for the 40 megawatt (MW) Alabama data center, syndicated by Goldman Sachs. The company says the structure is meant to preserve liquidity and limit shareholder dilution.
- Delivery dates held. The 13 October 2026 release says Phase 1 remains on track for December 2026 and Phase 2 for March 2027. The 14 August 2026 release sizes Phase 1 at 15 MW of information-technology load and Phase 2 at a further 25 MW.
- Insiders bought in the open market. SEC Form 4 filings show Chief Executive Officer Michel Amar bought 20,000 shares at $2.76 on 14 October 2026 and 20,000 shares at $3.60 on 19 August 2026. President Alec Amar bought 10,000 shares at $3.86 on 20 August 2026.
- No share issuance in the third quarter. The 13 October 2026 release says the company made no at-the-market share sales in the third quarter of 2026 and held cash of about $135 million.
- Management expects revenue to rise. The 14 August 2026 second-quarter release says third-quarter revenue is expected to rise significantly from the second quarter, which had about $1.1 million of graphics processing unit (GPU) rental revenue from roughly five weeks of operation.
- Long-range targets exist. The same release targets an annualized revenue run-rate of about $250 million to $300 million by the third quarter of 2027. Both figures are company targets that depend on contracting and deployment.
Bear case
- The financing is not closed. The commitment letter is expected to close within 90 days and is subject to definitive documentation and lender diligence, per the 13 October 2026 release. A failure to close would leave the buildout reliant on cash and share sales.
- Phase 2 depends on funding. The 14 August 2026 release says the March 2027 Phase 2 date depends on securing adequate financing.
- Cash is falling as spending rises. The company reported cash of $142.4 million on 30 June 2026, then about $135 million on 13 October 2026 alongside about $153 million of 2026 capital spending year to date.
- Losses are still wide. Second-quarter 2026 revenue was about $6.6 million against a net loss of about $14.4 million, per the 14 August 2026 release.
- Dilution capacity remains. The at-the-market program has $175 million of capacity (expanded 8 May 2026), so new shares can be issued at any time, and each share sold at $2.21 raises far less cash than at the May price range.
- The price keeps sinking. The shares closed at $1.90 on 5 November 2026, one cent above the 52-week closing low of $1.89 on 30 March 2026, and rebounded only to $2.21 by 12 November 2026.
Price setup
The last close was $2.21 on 12 November 2026. Recent closes were $2.28 on 11 November 2026, $2.16 on 10 November 2026, $2.24 on 9 November 2026, $2.08 on 6 November 2026 and $1.90 on 5 November 2026.
The shares trade below both the 50-day average of closes ($3.17) and the 200-day average ($3.92) as of 12 November 2026. The 52-week closing low of $1.89 on 30 March 2026 is the nearest downside reference. The 52-week intraday high of $9.20 on 13 May 2026 is the upper reference.
Catalysts ahead
- December 2026 (est.): Phase 1 Alabama campus ready-for-service target. Delivery starts revenue under the roughly $1.1 billion contract; a slip into 2027 breaks the timing case.
- ~11 January 2027 (est.): End of the 90-day window to close the $200 million debt financing. Closing would fund the Alabama build without new share sales; failure would revive dilution concerns.
Elapsed catalysts
- 13 November 2026: Third-quarter 2026 results and operations update, call at 8:30 a.m. Eastern. Shows whether third-quarter revenue rose from about $6.6 million, the updated cash and spending, and whether the December Phase 1 date holds. (passed)
What would change the view
A daily close above $3.20, over the 50-day average of closes, which would show the shares leading the S&P 500 again. Phase 1 of the Alabama campus entering service in December 2026 with the $200 million financing closed would also show it.
What it trades with
The shares trade with other bitcoin-mining companies that are converting power capacity into AI hosting and with GPU-rental and data center names, and they respond to AI capital-spending sentiment. Bitcoin prices matter less as legacy mining shrinks, but the company still reports mining and colocation revenue. Small-cap financing conditions matter because the buildout relies on debt and equity capacity.
The evidence, claim by claim (8)
- Commitment letter for $200 million of project-level debt financing for the 40 MW Alabama data center, syndicated by Goldman Sachs, expected to close within 90 days subject to documentation and diligence. Company press release, 13 October 2026 · as of
- Cash of about $135 million and 2026 year-to-date capital spending of about $153 million; no at-the-market share sales in the third quarter. Company press release, 13 October 2026 · as of
- Second-quarter 2026 revenue about $6.6 million (including $1.1 million GPU rental), net loss about $14.4 million, cash $142.4 million at 30 June 2026. Second-quarter 2026 results release, 14 August 2026 · as of
- Third-quarter 2026 revenue expected to rise significantly versus the second quarter; Phase 1 (15 MW) targeted December 2026 and Phase 2 (further 25 MW) March 2027, dependent on financing. Second-quarter 2026 results release, 14 August 2026 · as of
- Chief Executive Officer Michel Amar bought 20,000 shares at $2.76 on 14 October 2026 in an open-market purchase. SEC Form 4 filed 15 October 2026 · as of
- Company will report third-quarter 2026 results and an operations update on 13 November 2026 with a call at 8:30 a.m. Eastern. Company press release, 28 October 2026 · as of
- Jones Trading initiated coverage with a Buy rating and an $8.00 price target. StreetInsider, 28 September 2026 · as of
- Shares closed at $2.21 on 12 November 2026, down 44.3% over three months, 76.0% below the 52-week intraday high of $9.20 set on 13 May 2026. Adjusted daily closes · as of
Sources
Related · shared themes
BTDR
Bitdeer Technologies Group
Bitdeer Technologies Group is more likely to lag the S&P 500 over three months: cash of $213.7 million sits against about $1.95 billion of…
HUT
Hut 8
Hut 8's shift from bitcoin miner to AI data-center landlord, with about $19.6 billion of contracted Beacon Point leases, is more likely to…
IREN
IREN
IREN Limited's shares look more likely to lag the S&P 500, because its AI cloud ramp is behind its own $4 billion operating revenue-rate…
ORCL
Oracle
Oracle's shares look more likely to lag the S&P 500 over the next three months, as Microsoft's exit from rented capacity, a scrapped…