Why Hive Digital Technologies Stock Is Soaring Today

What happened

Hive Digital Technologies (HIVE -0.65%) stock is making big gains in Thursday's trading. The company's share price was up 10.4% in the daily trading session as of 10:45 a.m. ET, according to data from S&P Global Market Intelligence.

Hive published a press release yesterday announcing that it was changing its name from Hive Blockchain Technologies to Hive Digital Technologies. The new name reflects a shift into offering artificial intelligence (AI) processing services, and investors seem to be excited about the new business direction. 

So what

It's no secret that AI stocks have been red-hot lately. Beyond just tapping into the hype surrounding artificial intelligence from a short-term valuation perspective, Hive's recent name change signals a pivot that could have significant implications for the business's performance. 

As a company with operations that had previously been largely concentrated in the cryptocurrency mining space, Hive already has ample access to the kind of graphics processing unit (GPU) hardware that can be used for cloud-based AI computation services. Some of the Nvidia GPUs that Hive Digital Technologies had been using to mine cryptocurrencies will likely be transitioned to providing processing services for artificial intelligence applications, and new business ventures in the AI space could provide more stable sources of new revenue for the company. 

Now what

With Bitcoin and other cryptocurrencies rallying this year, Hive's business has already seen a substantial uptick and big stock gains. The company's share price is up 346.5% year to date as of this writing. 

Now that Hive is seemingly on track to tap into another hot tech trend, the company could be on track for further sales and earnings improvements. What's more, the push into AI could make the company's sales and earnings trajectory more stable and predictable. While cryptocurrency prices continue to be highly volatile, AI computing services should have much steadier pricing and also appear poised for a sustained demand upswing.