Cipher Mining's Strategic Pivot To AI Hosting Draws Analyst Support

Canaccord Genuity analyst Joseph Vafi reiterated a Buy rating on Cipher Mining Inc. (NASDAQ:CIFR) on Wednesday, maintaining an $8 price target, citing the company's unique positioning in both Bitcoin mining and AI hosting.

Vafi pointed to Cipher's advantageous power purchase agreement at its Odessa facility and the recent term sheet with Fortress Credit Advisors as signs of a differentiated approach. The Barber Lake site, he added, marks another pivot from mining to AI hosting, reflecting the company's evolving strategy.

Also Read: Bitcoin Mining Costs Jump To $137,000 Per Coin When Accounting For Non-Cash Expenses: CoinShares

While such pivots are gaining popularity given the potentially better long-term returns of AI hosting over crypto mining, the analyst emphasized that the transition demands significant capital investment—typically around $11million –$12 million per megawatt, excluding GPU costs.

However, Cipher Mining may be pursuing a different route by partnering with Fortress in a joint venture, which, according to details shared on the conference call, could eliminate the firm’s capital burden for building out the full 300MW capacity, in return for Fortress receiving a majority stake in the data center, Vafi writes.

This apart, the analyst pointed out that Cipher Mining is progressing ahead of schedule with Phase One development at its Black Pearl site, allowing the company to accelerate deployment.

As a result, the analyst highlights that the firm can repurpose older, idle rigs—previously replaced at the Odessa site—to begin mining earlier than planned.

Although these machines are less efficient, they're already paid off and remain profitable, Vafi adds.

The company aims to have them operational before full site energization in May, contributing an additional 2.5 EH/s in the second quarter. This move would increase Cipher Mining’s total capacity to 16 EH/s by the end of Q2.

Furthermore, new mining rigs are expected to start arriving later in the summer, supporting the company's scale-up to 23.1 EH/s by the end of the third quarter. Management is also working with equipment vendors to address potential tariff impacts.

Price Action: CIFR shares are trading higher by 3.4% to $3.12 at last check Thursday.

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