Edison issues initiation of coverage on Northern Data Group (NB2): Driving AI and data centre technology

London, UK, 19 December 2023

Edison issues initiation of coverage on Northern Data Group (NB2): Driving AI and data centre technology

Northern Data Group is a specialist provider of high-performance computing (HPC) infrastructure solutions. By leveraging a successful cryptocurrency mining heritage to fund global growth, the group has been able to expand into generative artificial intelligence (AI) cloud services and liquid-cooled data centre infrastructure. The European generative AI opportunity is substantial, where demand has surged but compute power remains limited. As the owner of Europe’s largest AI data hardware cluster, and requisite specialised data centre housing, Northern Data can enable democratised access to this transformative technology. With its elite partnerships and access to scarce hardware, the group is positioned to capture underserved demand in the AI space for hardware and housing.

Northern Data has undergone significant change, causing internal disruption with FY22 results yet to be released. We are therefore unable to provide forecasts yet. Management guides to sales of €65–75m and an adjusted EBITDA loss of €5–20m in FY23, followed by €200–240m sales and €50–80m adjusted EBITDA in FY24, respectively. Management also sees FY25 sales and adjusted EBITDA potential of €520–570m and €300–350m, respectively. Later we provide several scenarios once full deployment of its hardware is achieved, with our base case indicating potential revenue of €572m, at the top-end of management’s FY25 guidance.

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