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DGXX Bounces 6% After Brutal Earnings Selloff — But Can a $1.1 Billion AI Deal Rescue a Company Still Bleeding Cash?
Shares shifted as Digi Power X clawed back 6% to $7.65 on May 15, a day after a 14.66% collapse punished investors who had ridden the stock from $2.76 in mid-April to near $9. The trigger: a Q1 net loss of $4.7 million, nearly triple the year-ago loss of $1.6 million, on revenue of $6.8 million — down 27% from $9.3 million. Today's bounce looks like bargain hunters stepping in, not a fundamental rethink. Here's what matters.
The Old Business Is Shrinking on Purpose — But Revenue Still Fell Off a Cliff
Management calls Q1 an "inflection point," framing the revenue decline as a deliberate wind-down of legacy crypto mining to make room for AI computing. That's a fair narrative, but investors are being asked to accept worsening losses now in exchange for a business model that barely exists yet. The company's cloud computing arm only began generating its first AI revenue in May 2026 — meaning Q1 had essentially zero AI income.
A $1.1 Billion Contract Sounds Big — Read the Fine Print
CEO Michel Amar highlighted a 10-year data center hosting contract valued at $1.1 billion, expandable to $2.5 billion, with what he described as one of the world's top chipmakers. That's the headline number powering the stock's spring rally. But the first phase of its Alabama AI campus isn't expected to be ready until December 2026, starting at roughly 15 megawatts with a full 40-megawatt build-out in early 2027. Revenue from this deal is still quarters away.
The Balance Sheet Buys Time, but Dilution Looms
Digi Power X ended Q1 with $71.4 million in cash and $13.6 million in digital assets. No long-term debt. That's a cushion. However, the company expanded its equity sales program to $175 million in early May, having already sold $72.4 million in shares. Translation: it is funding construction by selling stock, which dilutes existing shareholders' stakes.
Volume Tells the Real Story
Trading volume hit 41.2 million shares — nearly seven times the average of 6.2 million — confirming this remains a momentum-driven trading vehicle, not a steady institutional hold. Short interest has surged over 1,000% in the past year , setting up volatile swings in both directions.
Bottom line: DGXX's pivot from crypto miner to AI landlord is ambitious but unproven. Until AI revenue actually shows up on the income statement, today's relief rally is sentiment, not substance.