WhiteFiber Secures $865M AI-Driven Colocation Deal, Spurring Buy Ratings and 127% Upside Outlook

WhiteFiber Inc. (WYFI) Announces Major Data Center Deal

WhiteFiber Inc. (WYFI) announced a major milestone with a 10-year, $865 million colocation agreement with Nscale Global Holdings. The deal secures 40 megawatts of critical IT load at WhiteFiber's flagship NC-1 data center campus in Madison, North Carolina. The agreement, signed through its subsidiary Enovum Data Centers, supports the company's strategy to expand high-performance computing infrastructure for AI workloads.

Analysts have reacted positively, with B. Riley reiterating a buy rating on the stock. The firm trimmed its price target to $40 from $44, citing a more conservative outlook for cloud services. This would represent a 127% upside from the stock's recent close, despite a more than 50% drop from its peak.

WhiteFiber is in advanced talks with lenders for a construction facility expected to close in early 2026. The company is also evaluating credit enhancements that could reduce its cost of capital. Management anticipates formalizing a credit facility by early Q1 2026, a move seen as crucial for scaling its AI infrastructure.

Strategic Validation and Market Implications

The Nscale deal is a validation of WhiteFiber's retrofit model and its ability to meet hyperscaler specifications. B. Riley analysts noted that the reaffirmation of the original deployment timeline demonstrates execution capability and confidence in the project. This is particularly important as the data center industry faces increasing competition and evolving demands for AI infrastructure.

WhiteFiber's CEO, Sam Tabar, emphasized the strategic importance of the deal. "This agreement validates our strategy to engineer NC-1 to meet hyperscaler specifications and support the most advanced AI workloads," he said. The NC-1 campus is designed to support up to 150 kilowatts per cabinet, with full redundancy in power distribution and N+1 cooling. The deal includes annual rate escalators and covers non-recurring installation charges. Nscale will also pay for power usage effectiveness, electricity, and pro rata property taxes. The contract is structured as a modified-gross lease, which helps WhiteFiber maintain a stable cash flow while mitigating some operational risks.

Analysts and Institutional Perspectives

Citizens maintained its Market Outperform rating on WhiteFiber stock, setting a $37 price target. This implies an approximately 7x 2027E EV/EBITDA multiple, suggesting the stock is undervalued relative to its peers. The firm estimates NOI margins for the NC-1 deal at around 90%, consistent with recent high-performance computing agreements.

H.C. Wainwright also reaffirmed a "Buy" rating on WhiteFiber, setting a $34 price target. The firm cited the Nscale agreement as a significant milestone, validating the company's fast-deploy model. Wainwright noted that the deal could lead to a long-term partnership with Nscale, a key player in AI infrastructure and cloud services.

Investing.com reported that WhiteFiber shares are currently trading near their 52-week low. The stock has declined over 23% in the past week alone, despite securing a major data center deal. Analysts remain optimistic, with a consensus "Strong Buy" rating and price targets ranging from $25 to $44.

Financial and Market Outlook

WhiteFiber's stock has faced significant pressure, trading near its 52-week low of $13.91. The company reported Q3 2025 revenue of $20.2 million, a 64% increase from the same period last year. However, the company posted a loss of $0.47 per share, missing analysts' expectations and causing shares to drop 12.62% after the earnings report.

Despite the recent decline, WhiteFiber has a strong liquidity position, with more cash than debt on its balance sheet. The company has invested $150 million of equity into the NC-1 site, and the deal is seen as a de-risking factor for future financing. Management expects the first phase of the deployment to begin billing by April 30, 2026, with the second phase following by May 30, 2026.

The company is also preparing for additional campus developments targeted for late 2026 and 2027. These projects are supported by growing customer interest and the availability of power from Duke Energy, which has a 99-megawatt capacity agreement with WhiteFiber. The company believes the NC-1 site could eventually support up to 200 megawatts of total electrical supply.

Risks and Investor Considerations

While the Nscale deal is a major positive, investors should remain cautious. WhiteFiber is currently burning through cash, with negative free cash flow. The company is in advanced discussions with lenders but has not yet secured a formal credit facility. Delays in financing could impact the timeline for future projects and affect investor sentiment.

The data center market is highly competitive, and WhiteFiber's success will depend on its ability to execute its expansion plans efficiently. The company's stock is trading at a discount relative to peers, but this could change if execution falls short of expectations. Analysts have varied price targets, reflecting the uncertainty surrounding the company's path to profitability.

WhiteFiber's management has acknowledged that power availability remains one of the biggest bottlenecks in the AI infrastructure ecosystem. This presents ongoing challenges for growth, but also highlights the importance of strategic partnerships like the one with Nscale. The company's ability to secure additional high-margin contracts will be a key factor in driving long-term value.