Cipher Mining (CIFR) simply delivered one of the crucial consequential weeks in its historical past, saying a significant AI internet hosting deal for its Barber Lake facility and a $1.1 billion convertible notice providing, strikes that collectively might redefine the corporate’s trajectory, dealer Canaccord Genuity mentioned in a report on Monday.
Canaccord reiterated its purchase score on the inventory and raised its worth goal to $16 from $12. The shares rose 1.2% in early buying and selling to round $11.60.
Whereas the market had been anticipating Cipher to safe an AI knowledge heart companion for Barber Lake earlier than year-end, final week’s announcement went additional than anticipated, the report mentioned. CIFR inked an settlement with Fluidstack, backed by Google, confirming its place within the “miner pivot-to-AI” pattern that’s sweeping the business.
Crucially, the deal arrived in throughout a flurry of hyperscaler and GPU cloud supplier contracts, serving to to validate demand for large-scale AI compute and placing to relaxation some issues about market measurement, a minimum of within the close to time period, analysts led by Joseph Vafi wrote.
The optimistic sentiment round Cipher’s prospects has been mirrored in its share worth over the previous a number of months, giving the corporate a stronger foreign money for capital elevating, the analysts famous.
The $1.1 billion convertible notice priced final week at a 0.00% coupon, an unusually engaging value of capital, and is anticipated to permit the corporate to retain 100% possession of Barber Lake, Canaccord mentioned.
Administration had earlier signaled that it is perhaps keen to promote a stake within the undertaking to scale back leverage. With improved fairness pricing and stronger market fundamentals, the corporate seems positioned to fund Barber Lake with out giving up fairness.
Extra AI offers are seemingly. The Barber Lake settlement doesn’t cowl your entire facility, leaving significant capability out there for future contracts. With a 2.6 gigawatt (GW) growth pipeline, energized websites like Odessa and the ramping Black Pearl may additionally see AI co-location offers sooner or later, the report added.
Learn extra: Cipher Mining Costs $1.1B Upsized Convertible Notice Providing