Summary BitFuFu has staged an operational and financial recovery since Q1 2025, with revenue doubling YoY and cloud mining demand accelerating. FUFU's fleet efficiency improved to ~17.5 J/Th, and unencumbered BTC holdings now cover over 20% of its $436 million market cap. I estimate Q4 revenue at $120–135 million, likely beating consensus, despite lower hashrate and Bitcoin prices; full-year revenue should reach $555–570 million. I reiterate a Buy rating on FUFU, citing undervaluation, institutional accumulation, and a forward P/S below 1.0x, but highlight BITMAIN dependency and hashrate volatility as key risks. I initiated coverage of BitFuFu ( FUFU ) in June 2024, when the company was relatively unknown. ButFuFu was a newly listed Bitcoin ( BTC-USD ) miner fresh off a $1.5 billion SPAC merger, but revenue was growing, and the stock was trading at a discount to all the publicly traded mining peers on an EV/sales basis. When I last covered BitFuFu in June last year on the release of the Q1 2025 results, FUFU was reeling from an unimpressive Q1 performance that saw revenue plunge 46% and a net loss of $16.9 million. Management blamed much of the financial decline on the Bitcoin halving that had happened a year before, and in that follow-up piece, I argued that management’s halving excuses were largely a deflection. The real issue, in my view, was a 28% collapse in hashrate due to expired procurement contracts and disruptions from supplier fleet relocations. Cloud mining registered users had nearly doubled YoY to over 607k users by Q1 2025. Demand was accelerating, but the infrastructure to serve the accelerated demand had temporarily lagged. I maintained that if BitFuFu could restock its shelves with newer-gen miners, a turnaround was imminent. And I maintained a Buy rating on that basis. BitFuFu's Operational Recovery Since Q1 2025: By The Numbers Some of the improvements that have happened on the ground since Q1 2025 include restoration of hashrate, which went up from 20.6 EH/s as of the end of Q1 to 36.2 EH/s by the end of Q2 2025. The mining hashrate as of the last monthly operational report for January 2026 has dropped to 29.6 EH/s, which I'll address in the risk section. But on a YoY basis, the hashrate remains up 46.5%. In addition to the hashrate recovery, BitFuFu's fleet efficiency has also improved. This is an underappreciated element of the recovery story. When I reported on BitFuFu's in May last year, average fleet efficiency stood at 19.1 J/Th. As of the latest monthly update (January 2026), that figure has improved to ~17.5 J/Th, driven by the deployment of next-generation Antminer S21 units. For investors who might not be familiar with mining terms and how the J/Th numbers are interpreted, lower joules per terahash (J/Th) means more Bitcoin produced per unit of electricity consumed and is a direct improvement in cost structure per BTC mined. In addition to the operational recovery, BitFuFu's financial trajectory post-Q1 has also been strong. As of Q1 last year, revenue was $78 million, and the company recorded a net loss of $16.9 million. The last 10-Q report , which was for Q3 2025, shows revenue improved to $180.7 million with $11.6 million in net income. Q3's $11.6 million net income includes a $3.1 million unrealized BTC gain. I'm flagging this not to diminish the bottom line results, but to show that the thesis does not need inflated numbers to hold. The core operational story (revenue doubling, cloud mining demand accelerating, hashrate recovering) stands on its own. On a YoY basis, revenue doubled. Adjusted EBITDA came in at $22.1 million. Q3 EPS beat the Street consensus of $0.03 by 100%, at $0.06. Cloud mining remains the dominant revenue segment for BitFuFu. In Q3 2025, cloud mining revenue reached $123 million, which was a 78.4% increase YoY, and it accounted for 68% of total revenue. Registered cloud users grew to over 641k, a 40.8% increase YoY. The metric I told readers to watch when I covered FUFU in Q1, Net Dollar Retention [NDR], came in at 118.8% in Q3. That means existing cloud mining customers have been spending more over time. BitFuFu held 1,796 BTC on its balance sheet as of the latest monthly update, though 252 BTC are pledged as collateral for loans and miner procurement payables, leaving ~1,544 BTC unencumbered. Which would be valued around $105 million at Bitcoin's current spot price of $69,000. This is a meaningful holding for a company with a market cap around $436 million. That holding already covers over 20% of FUFU’s current valuation. BitFuFu Q4 Expectations Q4 results will be released in March, and there is a pattern I've noticed while the stock has been down. Institutions that already hold FUFU have been adding to their positions. Fintel Mirae Asset Global ETFs tripled its stake from around 160k FUFU shares in mid-2025 to over 543,838 shares presently, as disclosed in their 13F-HR form filed just about a week ago. Another investment firm, Harvest Portfolios, increased its position by over 150% in Q3; Vontobel Holding initiated a new stake in Q3, and Invesco and Vident Advisory both initiated positions in Q2 and have recently increased their stake. As of today, FUFU has 20 institutional holders, who are long only. Though FUFU’s institutional holding is still a small amount (institutional buyers hold ~1.18 million shares against a ~17.8 million tradable float), it is still a good signal that the institutional holders are long only. Going into the Q4 earnings, the monthly operational updates in October , November , and December give enough to build a credible Q4 revenue and operational metrics estimate ahead of the earnings, so let me work through it. Hashrate averaged around 27.7 EH/s across Q4 (30.5 EH/s in October, 26.4 EH/s in November, and 26.1 EH/s in December). That is a 23% decline from Q3's average, which was 36.7 EH/s. BTC production across the three months came in at 672 BTC in total (253 in October, 231 in November, and 188 in December). That is around 43% lower than the BTC produced in Q3. The sequential decline isn't just limited to hashrate decline. Bitcoin's spot price fell sharply through the quarter too, from above $100K in early October to closing near $90K in December, with a dip around $84K in November. The average realized BTC price across Q4 was ~$80,000, compared to ~$97,000 in Q3. The implication of those two variables (lower hashrate and lower average BTC price) will have a meaningful impact on Q4 top line numbers. BitFuFu self-mined 30, 41, and 37 BTC, respectively, in October, November, and December. At BTC's average realized price of ~$80,000, self-mining contributed around $8.6M in revenue in Q4. That is down sharply from Q3, where self-mining revenue was $20.1 million. The cloud mining segment, which I expect to hold better given its contract structure and the 648,221 registered users as of November’s report, will likely soften the negative impact of the BTC price drop but may not offset it entirely. Cloud mining contract prices are correlated to Bitcoin spot price movement, but they don't move 1:1 with BTC price. Contracts priced earlier in the cycle provide some buffer. Self-mining revenue, on the other hand, is directly exposed. Thus, my Q4 revenue estimate lands in the $120 million to 135 million range. Which is well below Q3's record $180.7 million, and it will look bad in the headline comparison. But ordinarily I don't think it should dampen sentiment much. For context, $120 million to $135 million in a quarter where Bitcoin spent most of its time between $84K and $95K, when BitFuFu's hashrate was in active transition from legacy S19 machines to next-gen S21 units, and where management was simultaneously deleveraging the balance sheet by slashing pledged BTC from 620 to 274, is a solid operational quarter, in my view. BitFuFu Q4 consensus estimate (Seeking Alpha) Consensus estimates revenue for Q4 to be around $105 million, but based on the calculations I've outlined above, I believe FUFU will beat consensus on the top line. In November, management sold 205 BTC at an average price of $107,000, gaining $21.9 million in proceeds realized at close to the quarterly high for Bitcoin. That capital funded the pledged BTC reduction, which has strengthened the unencumbered treasury heading into 2026. It is the kind of financial management that does not show up in the top line but matters a lot for balance sheet quality and future operational flexibility. The unencumbered BTC moved from roughly 1,342 BTC at the end of Q3 to ~1,506 BTC at the end of Q4. On profitability, the Q4 net income picture will depend heavily on whether management recognized any unrealized BTC fair value gains, a variable that has swung results in both Q2 and Q3. My base case is that Q4 operating income would be thin but positive, supported by the fleet efficiency improvement to ~18.1 J/TH as the S21 transition progressed and the continued cloud mining user base. On the other hand, a net loss in Q4 should not be ruled out given the Bitcoin price environment, but I'd expect it to be modest, not a repeat of Q1's $16.9 million loss, which was driven by the diminished capacity problem, which no longer exists. With full-year BTC production of 3,662 BTC confirmed, the full-year FY25 top line should show revenue in the $555 million to $570 million range, which will be ~20% growth over FY24's $463.3 million. Data by YCharts For a company trading at ~$2.60 with a $436 million market cap, that full-year revenue figure produces a forward P/S ratio below 1.0x, which is not a multiple that reflects a company with 648k+ cloud mining users, a 17.5 J/Th efficiency, and 1,500+ unencumbered BTC on its balance sheet. This is one of the lowest sales multiples among publicly traded Bitcoin miners. Valuation Rerating Case Sell side analysts have set price targets between $6 and $7 for FUFU. B. Riley has maintained a $6 target, and H.C. Wainwright maintained a $7.00 target. BitFuFu hasn't been an aggressive diluter, so it is safe to say at current share count a ~$7 FUFU share price would imply a market cap around $1.17 billion. Which is around 2.7x of where FUFU trades today. On a P/S basis, $7 implies around 2x P/S against full-year FY25 revenue in the $555 million to $570 million range. For a miner with a cloud segment posting 118.8% NDR with 648k+ registered users and a fleet running at ~17.5 J/TH efficiency, I believe a 2x P/S is not a stretch at all. Risks I've covered the BITMAIN dependency in every article I've written on BitFuFu, and I'll state it one more time. The relationship is BitFuFu's single greatest competitive advantage but also its most material structural risk at the same time. BitFuFu signed a two-year framework agreement with BITMAIN spanning 2024 to 2026, granting exclusive rights to purchase up to 80,000 next-generation S-series miners; that is the hardware access that makes the fleet efficiency story possible. But the flip side is equally real. BITMAIN controls the hosting infrastructure, the hardware supply chain, and the service arrangements that BitFuFu's cloud customers depend on. Any deterioration in that relationship in terms of pricing or capacity allocation flows directly into BitFuFu's financials in a way that the company cannot easily offset. Also, the January 2026 hashrate of 29.6 EH/s, down from the Q2 peak of 36.2 EH/s, is a sequential decline worth watching closely. Of that 29.6 EH/s, 25.9 EH/s comes from third-party suppliers and only 3.7 EH/s from BitFuFu’s self-owned facilities, which means capacity can evaporate quickly when supplier contracts expire or hosting arrangements shift, which was exactly what triggered the Q1 2025 collapse. The hashrate remains up 46% YoY, and January's rebound from December's 26.1 EH/s low is encouraging, but management will need to provide a credible explanation on why the hashrate has stepped down materially from its mid-2025 peak and a clear path back toward the 33 EH/s full-year guidance they already surpassed last May to ease investor concerns about a repeat of 2025's early stumble going into 2026. The risk that cuts across everything else is where Bitcoin sits right now. We are at nearly 50% below the October all-time high price of $126,000 for Bitcoin. We are roughly now around 140 days into a bear market, and with all of BitFuFu's cloud mining contracts being Bitcoin denominated, prolonged price weakness could dampen sentiment among cloud miners if the mining economics become unfavorable. Takeaway BitFuFu is a fundamentally sound business trading at a price that currently reflects none of it, as the valuation multiples show. Therefore, I'm reiterating a Buy on FUFU.