Benchmark Raises Canaan Price Target to $4 on Mining Demand

Benchmark analyst Mark Palmer significantly raised Canaan’s price target from $2 to $4 per share, citing multiple positive developments for the Singapore-based mining hardware manufacturer. The new target implies substantial upside potential from Canaan’s current trading price of approximately $1.80, which would require a 118% increase to reach the benchmark. Palmer specifically highlighted the company’s attractive valuation, noting that Canaan trades at just 0.8x estimated FY27 enterprise value to sales, presenting what he called “an attractive opportunity for investors to gain exposure to the company’s accelerating turnaround story.”

The timing of the upgrade is particularly noteworthy given recent market conditions. Palmer pointed to yesterday’s broad selloff in crypto-related shares as creating an optimal entry point for investors. Despite Canaan’s stock trading 5.6% higher on Thursday following the announcement, the company’s shares remain down nearly 19% year-to-date, suggesting significant room for recovery if the analyst’s thesis proves correct.

A key factor in Benchmark’s upgraded assessment was Canaan’s recent compliance notification from the Nasdaq Stock Market. The exchange informed Canaan that it had successfully maintained the minimum bid price of $1 per share, eliminating the risk of delisting that had previously concerned investors. Since October, Canaan’s stock has consistently traded above this critical threshold, providing stability and regulatory certainty for the company’s listing status.

Perhaps even more compelling is Canaan’s substantial cryptocurrency treasury, which Palmer described as a “record” for the company. The manufacturer holds 1,582 Bitcoin and 2,830 Ethereum on its balance sheet, representing a combined value exceeding $186 million at current prices. This significant digital asset position provides financial flexibility and serves as a substantial reserve value that underpins the company’s valuation, particularly as Bitcoin recently traded around $110,340 despite an 8% decline over the past month.

Canaan’s business fundamentals show notable improvement, particularly in demand for its Avalon line of Bitcoin mining rigs. The company recently announced its largest order in three years—more than 50,000 Avalon A15 Pro Bitcoin mining machines from an unnamed U.S. customer. These computers represent Canaan’s latest-generation mining hardware, designed to deliver what the company describes as industry-leading efficiency and reliability, critical attributes as power costs increasingly determine mining profitability.

Palmer noted that “the company has steadily gained traction with these machines, appealing to miners seeking improved efficiency, reliability, and cost competitiveness.” This growing demand comes despite significant headwinds in the mining sector, where last year’s Bitcoin halving event reduced miner rewards from 6.25 to 3.125 BTC per block. The resulting pressure on profitability has forced miners to prioritize operational efficiency, creating demand for more advanced hardware like Canaan’s Avalon A15 Pro models.

The broader mining industry is also evolving, with many operators diversifying into high-performance computing applications integral to artificial intelligence. This trend has attracted significant investor interest, exemplified by Google’s recent announcement that it was backstopping a deal between AI compute company Fluidstack and Bitcoin miner Cipher, giving Google the right to purchase a 5.4% stake in Cipher. While Canaan remains focused on Bitcoin mining hardware, this industry evolution demonstrates the growing convergence between cryptocurrency infrastructure and traditional technology applications.