Northern Data shares rise as CG Capital Markets initiates coverage on stock ‘buy’

Investing.com — Shares of Northern Data AG (ETR:) climbed over 2% on Thursday after CG Capital Markets initiated coverage of the stock with a “buy” rating, citing growth potential in the company’s AI-driven compute and data center infrastructure operations. 

Analysts at CG Capital Markets set a price target of €60, reflecting optimism about Northern Data’s ability to capitalize on the burgeoning demand for high-performance computing and generative AI services.

The note flagged Northern Data’s rapid transformation from its roots in mining to its current focus on AI infrastructure, which positions the company as a key player in Europe’s growing AI ecosystem. 

The brokerage’s Taiga Cloud division, in particular, is expected to drive substantial revenue growth, with projections of nearly €400-440 million in 2025, making up over 75% of the group’s total revenue. 

This growth is underpinned by the deployment of high-end NVIDIA (NASDAQ:) GPUs and a focus on energy-efficient, scalable infrastructure.

Analysts also noted that Northern Data’s potential divestiture of its Peak division could further streamline operations and provide additional capital to expand its AI-focused data center footprint. 

This shift aligns with the company’s broader goals of meeting the rising demand for AI compute capacity while maintaining a competitive edge in energy efficiency and sustainability.

Despite recent gains in its share price, CG Capital Markets believes the stock remains undervalued, citing a current enterprise value-to-sales ratio that leaves room for further appreciation as utilization rates and operational efficiencies improve in the coming quarters.