Key insights
- Lucid Capital Markets initiated SharonAI (SHAZ) with a buy rating and a $50 price target, citing strong demand for AI infrastructure in the Asia Pacific region. The firm projects substantial revenue growth as deployments come online. However, the stock exhibits extreme volatility (beta of 8.22) and faces significant free cash flow burn over the next two years. While positive for SHAZ, the broader US equity market impact is limited.
Investing.com - Lucid Capital Markets initiated coverage on SharonAI Holdings Inc (NASDAQ:SHAZ) with a buy rating and a price target of $50.00. The target represents 46% upside from the current price of $34.26, though the stock has already surged over 1,700% year-to-date following its dramatic rise from a 52-week low of $0.11.
The firm said demand for AI infrastructure capacity is growing faster than new data centers can be built, and SharonAI is positioned to supply AI compute to a supply-constrained Asia Pacific market. The company’s strategy of deploying GPU clusters within existing data centers enables it to deploy AI compute quickly at scale.
SharonAI has secured 70MW of committed power in Tier III/IV Australian data centers through its partnership with NEXTDC. The firm said if SharonAI locks in long-term agreements to monetize 70MW of capacity at $3.50 per GPU-hour, in line with its recently announced 15MW deal with ESDS Software Solutions, that would translate to nearly $1 billion in revenue and $700 million in adjusted EBITDA.
Lucid Capital Markets said it expects substantial revenue growth as contracted deployments come online in the coming months and quarters. The $50 price target is based on 5.5x EV/EBITDA on the firm’s 2027 estimates, a slight discount to closest peer CRWV. Investors should note the stock’s beta of 8.22 signals extreme volatility. InvestingPro subscribers can access comprehensive risk metrics and financial health scores for deeper analysis.
The firm adjusted enterprise value for approximately $3.1 billion in expected free cash flow burn over the next two years, primarily to acquire GPUs.
In other recent news, SharonAI Holdings Inc. announced a significant $1.25 billion AI cloud infrastructure deal with ESDS Software Solutions Ltd., set to span five years. This agreement involves deploying an 8,000-unit B300 cluster in an Australian data center, with revenue expected to start in the third quarter of 2026. Additionally, SharonAI Holdings has partnered with World Wide Technology for the deployment of high-performance compute infrastructure in Australia and the Asia-Pacific region. This collaboration will focus on assembling and installing large-scale compute infrastructure, including NVIDIA systems. In corporate governance developments, SharonAI Holdings appointed Benjamin Adams to its board of directors, where he will serve as a Class I director until the 2026 annual meeting. Furthermore, SharonAI Holdings corrected a previous statement, clarifying that NVIDIA Corporation is not a strategic shareholder in the company. This correction was made in a recent SEC filing, emphasizing that NVIDIA holds no equity in SharonAI Holdings.
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