WhiteFiber: Premium-Priced Nscale Lease and Potential Credit Enhancement Underscore Undervalued Upside

John Todaro, an analyst from Needham, reiterated the Buy rating on WhiteFiber, Inc.. The associated price target remains the same with $38.00.

John Todaro has given his Buy rating due to a combination of factors related to WhiteFiber’s latest lease agreement and its valuation. He highlights that the newly signed 10-year, $865 million lease with Nscale for 40MW represents some of the strongest pricing in the sector, with first-year and average rates per megawatt above what is typically seen in comparable deals. Although the counterparty is not as strong from a credit perspective as those in some peer transactions and the contract term is somewhat shorter, he notes that WhiteFiber is actively pursuing a credit enhancement from an investment‑grade hyperscaler, which could meaningfully improve the risk profile of the cash flows.

Todaro also points out that Nscale itself is a strategically attractive partner due to its close ties with Microsoft, including a sizable existing hardware commitment and Microsoft’s option to significantly scale capacity starting in 2027. This embedded growth optionality, combined with the potential for a credit wrapper, supports his view that the market is overly discounting credit risk relative to the quality and economics of the lease. As a result, he believes WhiteFiber’s current share price undervalues the company’s earnings power and contracted revenue, justifying his reaffirmed Buy rating and expectation of substantial upside from current equity levels.

Todaro covers the Financial sector, focusing on stocks such as Robinhood, Gemini Space Station, Inc. Class A, and TeraWulf Inc. According to TipRanks, Todaro has an average return of 56.4% and a 59.38% success rate on recommended stocks.

In another report released today, Craig-Hallum also reiterated a Buy rating on the stock with a $25.00 price target.