Canaan (CAN) Stock Plummets 16%: Is Selling Short-Term a Loss? Explaining the Long-Term Hold Strategy
Introduction: Daring to Ask in a Noisy Market
Yesterday (2025/10/28), Canaan (NASDAQ: CAN) fell sharply by -16.87%. On X (formerly Twitter), many are saying, "It's time to sell." But is that really the case? I decided to write this article to re-examine that question for myself.
Nice to meet you, I'm Sen.
I'm new to X, and this is my first post on NOTE. First, a brief self-introduction.
Education/Work History: Keio University -> Worked at a marketing firm
Work Style: Work from 4:00 AM to 9:00 PM on weekdays / Study stocks on weekends
Investment Background: Focused on Tsumitate NISA until September 2025 -> Shifted to individual stocks from October 2025
Current Main Holding: Canaan Inc. (Ticker: CAN)
Goal: Build 100 million yen in assets by age 30
Before stepping into individual stocks, I thoroughly absorbed the basics from investor books and videos.
"If I keep learning, I can win..."—convinced of this, I have been focusing on individual stocks since October. I am still a beginner, but rather than acting arrogant only when things go well, I will share the learning process as well. I will record both wins and losses as a log of hypotheses and verification. I believe that the accumulation of this will eventually become "trust."
If you'd like, I also post on X, so I would be happy if you could follow me!
In this NOTE, I will base my analysis on data and primary information to articulate "why I make these judgments" without being swayed by market noise. Regarding Canaan, I will look at the actual state of the business rather than short-term price movements, and think neutrally about the reasons for holding long-term / risks of letting go.
Once again, thank you for your support.
(*This post is my personal record and view, and does not recommend buying or selling specific stocks)
Building Fundamentals with Facts
The basis for investment decisions comes from the accumulation of solid facts. Let's analyze the latest earnings information, industry trends, and corporate strategies from multiple perspectives, and make investment decisions with a calm perspective.
1. Revenue and Profitability: A Strong Recovery from the Bottom
Revenue is recovering rapidly. From bottoming out to a recovery phase.
2025 Q1 Revenue: $82.8 million (+135.9% year-on-year), significantly exceeding guidance.
Gross Profit: Improving to the verge of turning a profit.
Q2 2025 Revenue: Increased to $100.2 million.
Adjusted EBITDA: Achieved profitability.
This is not just a temporary boost, but a clear trend of recovery.
2. Diversified Revenue Streams: Expansion of Self-Mining
Maximizing revenue through three pillars: 'Manufacturing, Selling, and Mining'.
Self-Mining: As of September, 9.30 EH/s of deployed hashrate and 7.84 EH/s of operating hashrate.
Monthly Mining Output: Mined 92 BTC.
Crypto Inventory: Holding 1,582 BTC and 2,830 ETH.
Building a stable revenue base that is resilient to market fluctuations.
3. Orders and Customer Base: Strengthening Presence in the North American Market
Secured the largest order to date, demonstrating presence in the North American market.
A15 Pro: Secured the largest order in the past three years from a U.S. customer for over 50,000 units (scheduled for Q4 shipment).
Diversified Sales Channels: Mitigating the impact of geopolitical risks and tariff fluctuations.
Advancing strategic market development with consideration for geopolitical risks.
4. Operational Optimization: Efficiency Improvements in North America and Renewable Energy Integration
Achieving both cost reduction and environmental impact mitigation.
North American Efficiency: Improved to 19.7 J/TH.
Renewable Energy Site Integration: Establishing an environmentally conscious operational structure.
Strengthening initiatives for sustainable growth.
5. Products: Evolution of the A15 and Generational Shift with the A16
Balancing the refinement of existing products with the development of next-generation products.
A15 Series: Deploying models with up to 221 TH/s air-cooled performance and 16.8 J/TH efficiency.
A15 Pro: The balance of equipment price, efficiency, and reliability has been recognized, contributing to large-scale orders.
A16: Achieving high efficiency of 12.8 J/TH Establishing a competitive advantage in post-halving electricity cost competition.
Roadmap: Clearly defined pre-order acceptance and shipping from North America, East Asia, and Southeast Asia.
Our strengths lie in our product development capabilities that meet market needs and our clear business strategy.
6. Macro Environment: Continued Demand for High-Efficiency Machines After the Halving
Investment in high-efficiency machines continues even after the halving.
BTC Price: Trading in the new high range.
Institutional Money Inflow: Ongoing.
Customer Investment Criteria: In a world of rising difficulty × rising electricity costs, improving J/TH (Joules per Terahash) is paramount.
We are capturing changes in the market environment and meeting the demand for high-efficiency machines.
7. Finance and Capital Policy: Accelerating Growth Through Flexible Fundraising
The introduction of the ATM program is a strategic move with an eye on the future.
ATM (at-the-market): Established a program of up to $270 million.
Use of Proceeds: Data center expansion and production capacity enhancement.
Benefits: Ability to raise funds as needed, when needed.
We prioritize long-term growth strategy over short-term dilution risk.
Conclusion: The Rationale for 'Not Selling' Now and Future Focus Points
My conclusion is simple.
Canaan has established (1) a recovery in sales and profitability, (2) large-scale orders in the U.S., (3) the introduction of next-generation efficiency with the A16, (4) optionality through expanded self-mining and crypto inventory, and (5) an aggressive stance of flexible capital policy. Contrary to short-term volatility and ATM headlines, the fundamental strength of the business has actually been reinforced. Therefore, I believe 'holding without selling now' is rational.
Future Focus Points (Checklist)
A16 mass production and shipment progress (yield, delivery lead times, and effective efficiency)
Timing of revenue contribution from large-scale orders (Q4 delivery to acceptance and payment cycles)
Changes in self-mining EH/s and BTC inventory (sales policy and unrealized gain management)
Expansion of power costs and sites in North America (progress on PPA/renewable energy integration)
ATM execution status (transparency in issuance volume, procurement costs, and dilution pace)
Risks (Briefly)
Market risk: Sales/mining revenue can fluctuate due to BTC price, network difficulty, and tariffs/regulations.
Execution risk: Mass production and delivery lead times for the A16, acceptance/payment for large-scale projects, and the ramp-up of North American sites.
Dilution risk: Short-term stock price pressure depends on the issuance pace of the ATM. The focus for the medium to long term is whether it can be absorbed by revenue growth from growth investments.
Summary
Do not be swayed by short-term market fluctuations; instead, assess Canaan's intrinsic value.
The generational shift in products driven by the A16, large-scale orders in the U.S., self-mining capacity that has grown to 9.30 EH/s, and the revenue recovery in Q1/Q2. These are all backed by concrete figures and track records.
These facts suggest that "there are currently far more reasons to hold than to sell."
Disclaimer:
This article is for informational purposes only and does not recommend buying or selling any specific stock. Please make investment decisions at your own risk.
Thank you for reading until the end.
If you like, please follow me on X (https://x.com/sen340343843784)!
I plan to continue posting not only about CAN, but also about other stocks that look promising for future growth!
