HIVE Digital Technologies Ltd. (HIVE) delivered a solid fiscal second-quarter beat on Tuesday, though the stock dipped anyway—because markets are sometimes weird like that.

The real story here isn't just the quarterly numbers. It's what HIVE plans to do next with its AI Cloud business, and analysts are paying attention.

What the Analysts Are Saying

HC Wainwright analyst Mike Colonnese kept his Buy rating and bumped the price target to $10. Rosenblatt Securities analyst Chris Brendler stuck with his Buy rating and $10 target as well.

Colonnese highlighted HIVE's strategic push into AI Cloud expansion, noting that management is guiding toward $140 million in annual recurring revenue for the HPC/AI business by the end of 2026. The company laid out a clear roadmap: grow from roughly 5,000 GPUs installed today to 11,000 GPUs by the end of next year to hit that target.

Here's the interesting part—the capital expenditure needed for this expansion should be "relatively minimal," according to Colonnese. Why? Because HIVE intends to use vendor financing for all 6,000 additional GPUs. Smart move if you want to scale without draining your cash reserves.

The Numbers Behind the Beat

Brendler pointed out that HIVE reported revenues of $87.3 million, topping estimates of $80.2 million. The beat came from two main drivers: strong bitcoin production of 718 coins (versus the expected 649) and gross margin expansion in its core bitcoin mining operations.

The analyst also noted that HIVE's Bitfarms sites in Paraguay are "now fully powered up with next-gen ASICs." Combined with the vendor-financed GPU expansion plan, this should significantly reduce the company's capital burden going forward.

Stock Movement

Despite the positive results and analyst support, shares of HIVE Digital Technologies fell 1.74% to $3.50 on Tuesday.