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Cipher Mining (CIFR) conscionable delivered 1 of the astir consequential weeks successful its history, announcing a large AI hosting woody for its Barber Lake installation and a $1.1 cardinal convertible enactment offering, moves that unneurotic whitethorn redefine the company’s trajectory, broker Canaccord Genuity said successful a study connected Monday.
Canaccord reiterated its bargain standing connected the banal and raised its terms people to $16 from $12. The shares roseate 1.2% successful aboriginal trading to astir $11.60.
While the marketplace had been expecting Cipher to unafraid an AI information halfway spouse for Barber Lake earlier year-end, past week’s announcement went further than anticipated, the study said. CIFR inked an agreement with Fluidstack, backed by Google, confirming its spot successful the “miner pivot-to-AI” inclination that is sweeping the industry.
Crucially, the woody arrived successful during a flurry of hyperscaler and GPU unreality supplier contracts, helping to validate request for large-scale AI compute and putting to remainder immoderate concerns astir marketplace size, astatine slightest successful the adjacent term, analysts led by Joseph Vafi wrote.
The affirmative sentiment astir Cipher's prospects has been reflected successful its stock terms implicit the past respective months, giving the institution a stronger currency for superior raising, the analysts noted.
The $1.1 cardinal convertible enactment priced past week astatine a 0.00% coupon, an unusually charismatic outgo of capital, and is expected to let the institution to clasp 100% ownership of Barber Lake, Canaccord said.
Management had earlier signaled that it mightiness beryllium consenting to merchantability a involvement successful the task to trim leverage. With improved equity pricing and stronger marketplace fundamentals, the institution appears positioned to money Barber Lake without giving up equity.
More AI deals are likely. The Barber Lake statement does not screen the full facility, leaving meaningful capableness disposable for aboriginal contracts. With a 2.6 gigawatt (GW) improvement pipeline, energized sites similar Odessa and the ramping Black Pearl could besides spot AI co-location deals successful the future, the study added.
Read more: Cipher Mining Prices $1.1B Upsized Convertible Note Offering
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