Last Update 20 Jan 26

Fair value Decreased 2.10%

CIFR: Long Term Hyperscaler Lease Will Support Future AI Data Center Leadership

The analyst fair value estimate for Cipher Mining has edged down from US$27.25 to about US$26.68 as analysts factor in higher Street price targets tied to the Amazon Web Services AI infrastructure lease, along with emerging views on earnings visibility and valuation multiples in high density data centers.

Analyst Commentary

Recent Street research around Cipher Mining is clustering around the long term Amazon Web Services AI infrastructure lease and what it could mean for valuation, execution risk and growth in high density data centers.

Bullish Takeaways

Bullish analysts are leaning into the view that bitcoin miners with access to large scale power and infrastructure are well placed to support high performance compute and AI workloads, which they see as a source of potential value creation beyond traditional mining.
The US$5.5b, 15 year AWS agreement for 300 MW of planned capacity at Black Pearl in 2026 is being framed as a way to increase earnings visibility over a long period, which these analysts link directly to support for higher valuation multiples.
Some research calls out Cipher Mining's positioning as a provider of large scale, high density data center capacity, with the AWS relationship and prior Fluidstack exposure viewed as helpful for diversifying revenue drivers tied to AI infrastructure.
Bullish analysts also highlight that signing a major colocation agreement directly with a hyperscaler is viewed as a credibility boost in the HPC and AI data center space, which they see as supportive of the company winning additional workloads or customers over time.

Bearish Takeaways

While targets cited in recent research are above the current fair value estimate, the gap between higher Street price targets and the trimmed analyst fair value suggests some caution on how much of the AWS related upside is already reflected in the shares.
The emphasis on future AI and HPC use cases introduces execution risk around delivering 300 MW of power capacity at Black Pearl in 2026, including build out, timing and the ability to operate at the economics implied by current expectations.
Dependence on a single very large lease agreement could raise concentration risk, with valuation sensitive to how the AWS arrangement performs over its 15 year term relative to current assumptions on utilization and pricing.
As the market shifts focus from bitcoin mining toward high density data centers, investors may need to weigh uncertainties around capital intensity, contract structures and long term returns on infrastructure, which could limit how far valuation multiples expand.

What's in the News

Bitcoin miners including Cipher Mining are being highlighted for repurposing data centers toward AI workloads, giving them access to large AI customers at a time when bitcoin mining economics are under pressure (Wall Street Journal).
Cipher announced an approximately US$5.5b, 15 year lease agreement with Amazon Web Services to provide 300 MW of turnkey space and power for AI workloads, with capacity expected to be delivered in two phases beginning in July 2026 and rent scheduled to start in August 2026.
The company entered a 10 year HPC colocation agreement with Fluidstack covering the full 300 MW Barber Lake site, tied to approximately US$830m in contracted revenue over the initial term, with two 5 year extension options and Google backstopping an additional US$333m of Fluidstack lease obligations.
Cipher announced the acquisition of the 200 MW Ulysses site in Ohio, a 195 acre property with secured capacity from AEP Ohio and access to PJM, with energization targeted for the fourth quarter of 2027 and described as suitable for HPC and AI data center development.
The company formed a joint entity to develop the 1 GW Colchis site in West Texas. This project is backed by a Direct Connect Agreement with American Electric Power for dual interconnection and has a targeted energization in 2028, with Cipher expected to hold about 95% equity ownership under typical lease and development terms.

Valuation Changes

The fair value estimate has edged down slightly from US$27.25 to about US$26.68 per share.
The discount rate has moved marginally lower from 8.86% to about 8.83%.
The revenue growth assumption has been adjusted slightly higher from about 91.05% to roughly 91.22%.
The net profit margin assumption has been trimmed from about 4.49% to roughly 4.38%.
The future P/E multiple has been nudged up from about 263.0x to roughly 263.4x.

Expanding production capacity and developing adaptable infrastructure positions the company for higher Bitcoin output, revenue growth, and diversification into high-performance computing.
Focus on energy efficiency, low power costs, and flexible operations enhances margins, revenue stability, and adaptability to evolving tech and energy market trends.
Heavy dependence on volatile Bitcoin mining, high capital needs, variable energy costs, uncertain new ventures, and fast-changing technology threaten margins, revenue stability, and asset value.

Catalysts

About Cipher Mining

Develops and operates industrial-scale data centers in the United States.What are the underlying business or industry changes driving this perspective?

The rapid expansion and optimization of production capacity, notably through adding Black Pearl Phase 1 and the upcoming Phase 2, along with fully funded next-generation miner deployments, positions Cipher to significantly increase its hash rate and Bitcoin output, directly supporting future top-line revenue growth.
Industry-wide demand for large-scale, flexible, and energy-rich data center sites-driven by accelerating institutional and mainstream adoption of digital assets and AI-aligns with Cipher's strategy to develop infrastructure that can quickly pivot between Bitcoin mining and high-performance computing (HPC), creating upside potential for both revenue diversification and earnings stability.
Cipher's long-term, low-cost power purchase agreements (e.g., Odessa's 5-year fixed price PPA) and advanced proprietary software for optimizing curtailment and energy usage ensure consistently low power costs, improving net margins and providing structural resilience against energy price volatility.
The company's focus on energy efficiency-evidenced by targeted improvements in fleet efficiency to among the industry's best and investments in sustainable mining infrastructure-positions Cipher to benefit from broader, long-lasting emphasis on sustainable and renewable energy in technology sectors and could support higher net margins.
Active participation in ERCOT's ancillary services market and expansion into flexible, modular data center designs offer incremental, recurring revenue streams and quick adaptation to future compute demands, potentially reducing revenue cyclicality and supporting upside to future earnings.

Cipher Mining Earnings and Revenue Growth

Cipher Mining Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Cipher Mining's revenue will grow by 63.6% annually over the next 3 years.
Analysts are not forecasting that Cipher Mining will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Cipher Mining's profit margin will increase from -96.9% to the average US Software industry of 13.1% in 3 years.
If Cipher Mining's profit margin were to converge on the industry average, you could expect earnings to reach $91.1 million (and earnings per share of $0.19) by about September 2028, up from $-154.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $101.7 million in earnings, and the most bearish expecting $-89.2 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 52.2x on those 2028 earnings, up from -20.7x today. This future PE is greater than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.57%, as per the Simply Wall St company report.

Cipher Mining Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Cipher Mining's revenue is highly leveraged to Bitcoin price cycles with limited diversification outside Bitcoin mining; prolonged bear markets or reduced network block rewards in future halvings may result in large, sustained declines in revenue.
The company's heavy investment in constant hardware upgrades and aggressive infrastructure expansion requires significant ongoing capital expenditures, increasing depreciation expenses and potentially leading to net margin compression or future capital raises that could dilute earnings per share.
While the company touts low-cost power contracts, several sites (notably joint ventures and new front-of-the-meter locations) have much higher and more variable electricity costs; any disruption or unfavorable shifts in energy markets or regulatory action (such as carbon taxes) could materially increase operating costs and negatively impact profitability.
The shift in strategic focus toward high-performance computing (HPC) is predicated on uncertain tenant demand and protracted lease negotiations; slow progress in finalizing agreements, tenant hesitancy, or overbuilding ahead of confirmed deals risks leaving capital tied up in underutilized assets and suppressing long-term returns on investment.
Rapid technological change (faster ASIC or GPU upgrade cycles) and evolving industry standards create the risk of Cipher's large new buildouts becoming obsolete or needing costly retrofits, which could impair asset values and erode the firm's competitive positioning, ultimately impacting both net margins and future revenue growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $7.727 for Cipher Mining based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $9.0, and the most bearish reporting a price target of just $6.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $696.2 million, earnings will come to $91.1 million, and it would be trading on a PE ratio of 52.2x, assuming you use a discount rate of 8.6%.
Given the current share price of $8.11, the analyst price target of $7.73 is 5.0% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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