WhiteFiber's second-quarter results prompted Needham to maintain its Buy rating and $38 price target on Thursday. The target implies about 33% upside from the AI infrastructure operator's August 12 closing price of $28.58.
WhiteFiber (NASDAQ: WYFI) generated $28.8 million of second-quarter revenue, up 54% year over year and above Needham's $22 million estimate. Adjusted EBITDA rose 69% to $5.5 million, compared with the firm's $4 million estimate, while WhiteFiber recorded a $15 million net loss.
The reported revenue included $12.3 million tied to a previously disclosed cloud customer termination. Needham calculated underlying cloud revenue at $11.5 million, reflecting downtime between expiring contracts and new deployments, while colocation revenue of $4.7 million missed its $7.7 million estimate because NC-1 billing started later than expected.
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Needham increased its 2026 revenue forecast to $159.8 million from $152.3 million and raised its adjusted EBITDA estimate to $71 million from $65.6 million. Its 2027 forecasts moved to $285.5 million of revenue and $175.2 million of adjusted EBITDA, from $284.3 million and $173.3 million, respectively.
NC-1 begins its contracted ramp
WhiteFiber had started billing 20 MW of contracted IT load at NC-1 by its August 12 earnings call. Management expects the full 40 MW to reach run-rate billing by the end of August under a 10-year Nscale agreement representing about $865 million of contracted revenue.
Needham said previously disclosed switchgear problems had been resolved. WhiteFiber is also negotiating definitive documents for secured NC-1 financing with a consortium of lenders after funding the project with equity. The proposed financing would return part of the invested capital to WhiteFiber's balance sheet for deployment into another site.
The next colocation opportunity is in late-stage diligence and could provide about 60 MW of power in 2027, with expansion potential beyond 250 MW. WhiteFiber is negotiating a purchase agreement and favors a single-tenant structure with investment-grade credit support, according to Needham.
Cloud contracts reach $540 million
WhiteFiber has signed four multi-year cloud agreements with aggregate contract value exceeding $540 million since the first quarter. The contracts include 1,392 NVIDIA B300 GPUs for Baseten and 576 Vera Rubin 200 GPUs for Prime Intellect, WhiteFiber's first disclosed Vera Rubin deployment.
Needham estimated pricing across the agreements at $3.47 to $7.13 per GPU-hour, with an average term of four years. Customer prepayments and third-party equipment financing are expected to reduce WhiteFiber's equity requirements as the contracted portfolio ramps toward more than $200 million of annual recurring revenue.
Needham based its $38 target on 12.5 times discounted 2027 EV/adjusted EBITDA. The firm cited site-development delays, cloud customer concentration and weaker AI demand among the principal risks to its forecast.
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Needham disclosed that WhiteFiber has received investment banking services from the firm during the past 12 months. Needham also managed or co-managed a WhiteFiber securities offering and makes a market in its shares.
