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Investing.com - H.C. Wainwright has reiterated its Buy rating and $30 price target on Cipher Mining (NASDAQ:CIFR) following the company’s announcement of a new AI colocation agreement. The target represents over 100% upside from CIFR’s current price of $14.56, with analyst consensus strongly bullish at 1.5 (Buy) and price targets ranging from $12 to $50.
Cipher Mining shares rose 9% on November 20 while the Nasdaq declined slightly, after the company disclosed a 10-year AI colocation agreement with Fluidstack for 39 MW of critical IT load at its Barber Lake facility.
The agreement is expected to generate $830 million in incremental revenue for Cipher over the initial term, with NOI margins of 85%-90%, according to the company. The contract includes two five-year extension options that could bring the total value to approximately $2.0 billion.
Google has agreed to backstop $333 million of Fluidstack’s lease obligations, representing 40% of the total contract value. The economics of the deal amount to $2.13 million per MW per year, which H.C. Wainwright describes as more attractive than other market transactions.
Cipher estimates the incremental data center capacity will cost approximately $370 million to build, to be funded with a combination of project-level debt (about 70%) and equity (about 30%), with debt financing expected to come from the company’s proposed $333 million senior secured notes offering announced on November 20.
In other recent news, Cipher Mining Inc. announced the pricing of $333 million in additional 7.125% senior secured notes due in 2030. This issuance, conducted through its subsidiary Cipher Compute LLC, will increase the total outstanding notes to $1.733 billion. The company also revealed a significant 10-year AI hosting agreement with Fluidstack, securing approximately $830 million in contracted revenue. This agreement involves delivering an additional 39 MW of critical IT load at the Barber Lake site in Texas, allowing Fluidstack to lease the entire 300 MW capacity. Furthermore, Cipher Mining’s stock received its first coverage from Citizens, which initiated a Market Outperform rating with a $30.00 price target. Analyst Greg Miller from Citizens noted Cipher’s strategic shift from bitcoin mining to leveraging its 3.8 gigawatt power capacity in Texas. The company has also mentioned the potential for this power capacity to translate into a significant increase in stock value over time. These developments highlight Cipher Mining’s strategic moves to expand its financial and operational capabilities.
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