Citizens Reiterates Market Outperform on WhiteFiber (WYFI) After Major AI Colocation Agreement

Core Viewpoint - WhiteFiber, Inc. (NASDAQ:WYFI) is positioned as a significant player in the AI infrastructure market, bolstered by a long-term colocation agreement with Nscale valued at approximately $865 million, which enhances its long-term AI infrastructure capabilities [1][3]. Group 1: Agreement Details - The 10-year agreement with Nscale involves 40MW of critical IT load, structured as a modified gross lease, with an estimated total contract value of about $865 million, including annual escalators and installation charges [2][3]. - The capacity will be delivered in two phases, with the first 20 MW expected to be operational by April 30, 2026, and the remaining 20 MW by May 30, 2026 [3]. Group 2: Financial Implications - WhiteFiber has already invested $150 million in the project, covering approximately 35% of the total construction costs, which significantly reduces financial risks associated with the build-out [2][3]. - The company's net operating income (NOI) margins are estimated to be around 90%, aligning with other recently signed high-performance computing (HPC) colocation agreements [3]. Group 3: Market Position and Future Outlook - With a major tenant secured, WhiteFiber is well-positioned for further expansion, including additional campuses targeted for late 2026 and 2027 [4]. - Citizens maintains a Market Outperform rating on WhiteFiber with a price target of $37, implying an estimated 7x EV/EBITDA multiple for 2027 [4].