Cipher Mining (CIFR) just delivered one of the most impacting weeks in his story, announcing a large AI Hosting Agreement for his Barber Lake facility and a convertible note offer of $ 1.1 billion, moving together, which together can redefine the company’s orbit, broker cancord Genuity in a report Monday.
Canaccord repeated its purchase rating on the stock and raised its price target to $ 16 from $ 12. The shares rose 1.2% in early trading to about $ 11.60.
While the market had expected digit to secure an AI data center partner for Barber Lake by the end of the year, last week’s announcement went longer than expected, the report said. CIFIR broke an agreement with Fluidtack, supported by Google, confirming its place in the “Miner Pivot-to-ai” trend that sweeps the industry.
Of crucial importance, the agreement arrived under a flurry of hypercaler and GPU cloud provider contracts, which helped to validate the demand for large-scale AI calculation and put some concern for market size, at least in the short term, analysts wrote by Joseph Vafi.
The positive mood of Cipher’s prospects has been reflected in its share price in the last several months, giving the company a stronger currency for capital collection, the analysts noted.
The $ 1.1 billion convertible note was priced last week to a coupon of 0.00%, an exceptionally attractive capital cost and is expected to allow the company to keep 100% ownership of Barber Lake, Canaccord said.
Management had previously signaled that it might be willing to sell a share in the project to reduce leverage. With improved equity prices and stronger market surveys, the company seems to finance Barber Lake without giving up equity.
More AI offers are likely. The Barber Lake agreement does not cover the entire plant, leaving a meaningful capacity available to future contracts. With a 2.6 Gigawatt (GW) development pipeline, energetic sites like Odessa and the ramping Black Pearl could also see AI co-operation agreements in the future, the report added.
Read more: Chiffer mining prices $ 1.1 b upward convertible note deals
