DGXX's Alabama GPU Cluster Step Forward Masks Persistent Financing and Execution Risks

What happened

Digi Power X announced the implementation of its first B200 GPU cluster at the Columbiana, Alabama site, with plans to begin data processing in Q1 2026, aligning with its strategic pivot to AI/HPC data centers. This development follows the DeepValue report's outline of a Tier 3 build plan aimed at leveraging secular demand for data center power. However, the report highlights severe near-term risks, including a $3.4 million working capital deficit, a going-concern disclosure, and reliance on external financing and anchor customers. The press release does not address whether these critical risks have been mitigated, such as securing project debt or signing multi-year colocation contracts. Therefore, while operational progress is evident, investors should view this as an incremental step rather than a resolution to the underlying financial and execution challenges.

Implication

The GPU cluster implementation signals DGXX is executing its AI/HPC pivot, which could improve revenue quality if successful. However, without confirmed financing or customer contracts, cash flow visibility remains low, and the going-concern risk persists, as noted in the DeepValue report. Success depends on securing non-recourse debt and anchor AI/HPC customers, which are key watch items for any thesis upgrade. Delays or cost overruns in Alabama could worsen liquidity issues, potentially triggering a downgrade. Thus, investors must await updates on financing and customer traction before considering a more bullish position.

Thesis delta

This announcement confirms DGXX is advancing its Tier 3 data center plan, supporting the strategic upside highlighted in the DeepValue report. However, it does not change the fundamental thesis, as critical near-term risks—financing, customer traction, and liquidity—remain unresolved. The stance stays HOLD/NEUTRAL, with a shift contingent on future milestones like secured debt or contracted revenues.