Keel Infrastructure Corp (NASDAQ: KEEL) saw its shares trade higher in premarket activity Wednesday after Citizens initiated coverage on the company with a Market Outperform rating and a $10 price target. The stock was quoted at $6.98 ahead of the Nasdaq cash open, following a Tuesday close of $6.60.
Citizens analyst Greg Miller initiated coverage with a bullish stance, citing Keel's strategic pivot from its origins as Bitfarms to becoming an AI-focused power and data center operator. Miller set a $10 price target, implying approximately 51% upside from the previous session's close. The analyst noted the company's approximately 2.2-gigawatt power pipeline, with projects located in Pennsylvania, Washington state, and Quebec.
The call on Keel hinges on the company's ability to lease its substantial power capacity to AI and high-performance computing (HPC) clients. The company, which rebranded from Bitfarms on April 1 and moved its headquarters to New York, now focuses on building and owning data centers and power assets for AI training and inference workloads.
Keel CEO Ben Gagnon told investors in May that the company is entering its next phase with "strong momentum" and aims to have its three key projects—Panther Creek and Sharon in Pennsylvania, and Moses Lake in Washington—ready for lease signing by 2026. CFO Jonathan Mir added in the first-quarter release that current liquidity "fully funds the capital required" to bring these sites to that stage.
Despite the optimistic outlook, Keel faces execution risks. The company reported first-quarter revenue of $37 million, a 23% decline year-over-year, and a loss from continuing operations of $128 million, or 21 cents per share. As of May 8, Keel had liquidity of approximately $533 million, including $336 million in unrestricted cash and $197 million in unencumbered bitcoin.
Keel recently completed a $458 million sale of 1.25% convertible senior notes due 2032, netting approximately $445.4 million in proceeds before expenses and capped-call costs. The capped-call arrangements are designed to limit shareholder dilution if the stock price appreciates.
The company has yet to secure a major anchor lease for its flagship projects, unlike competitor Applied Digital, which signed a 15-year, $5.2 billion AI data-center lease with a U.S. investment-grade hyperscaler this month. Keel's risks include potential delays, cost overruns, permitting challenges, reliance on power availability, customer issues, and competition from established HPC data center operators. The company has also noted that trading in its shares is highly speculative.
Keel trades on both the Nasdaq and Toronto Stock Exchange under the ticker KEEL. The stock's premarket gain reflects investor optimism around the company's AI-focused transformation, though the path to profitability remains uncertain given the competitive landscape and the need to secure large-scale leases.
