On Tuesday, JPMorgan (NYSE:JPM) shifted its stance on Cipher Mining (NASDAQ: NASDAQ:CIFR), raising the stock from Neutral to Overweight and setting a price target of $8.00. The upgrade reflects a positive outlook on the company's expansion and operational advancements in the bitcoin mining sector.
According to InvestingPro data, the stock has delivered an impressive 119% return over the past year, with analysts expecting the company to turn profitable this year.
Cipher Mining, known for building, owning, and operating electrical infrastructure and data centers dedicated to bitcoin mining, currently operates four data centers across Texas. These facilities boast a combined 327 megawatts (MW) of power, delivering over 12 exahashes per second (EH/s) in mining capacity. The company's strong operational performance is reflected in its 76% year-over-year revenue growth and healthy gross profit margin of 62%.
Additionally, the company is progressing on a new 300MW greenfield site expected to be operational in the first half of 2025. For deeper insights into Cipher Mining's financials and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, featuring expert analysis and key metrics.
The firm is also broadening its expertise to include the construction and management of high-performance computing (HPC) data centers. JPMorgan highlighted Cipher Mining's advantageous power contract, which is priced below $0.03 per kilowatt-hour, as a significant competitive edge. This, coupled with fleet upgrades, is anticipated to enhance the company's mining economics.
InvestingPro analysis shows the company maintains a strong current ratio of 2.57 and operates with moderate debt levels, providing financial flexibility for its expansion plans.
Cipher Mining's hashrate is projected to surge by more than 190%, while its active power capacity is expected to increase by over 90% going into 2025. JPMorgan also noted that among the companies it covers, Cipher Mining is in a prime position to secure a deal in the HPC market within the next three to six months, which could further propel the company's shares.
In other recent news, Cipher Mining Inc. has reported substantial growth in its Bitcoin production for the month of November, mining approximately 2,021 bitcoins. The company also reported increased Bitcoin production in October, mining around 1,681 bitcoins. Cipher Mining's operational updates highlight the ongoing upgrade of its mining fleet and the development of the new Black Pearl data center.
In addition, Cipher Mining has announced a strategic shift towards developing high-performance computing (HPC) data centers. Despite a GAAP net loss of $87 million for the third quarter, the company has acquired five greenfield development sites in Texas, suitable for both HPC operations and Bitcoin mining. The company expects to energize the Black Pearl site in Q2 2025 with a target capacity of 21.5 exahash per second.
In the broader cryptocurrency market, Bitcoin recently soared past the $100,000 mark for the first time. This surge came after President-elect Donald Trump's decision to appoint Paul Atkins as the new Chair of the Securities and Exchange Commission (SEC), signaling a supportive stance towards cryptocurrencies. Companies with exposure to cryptocurrency, including Cipher Mining, have experienced substantial gains following this development. These are recent developments in the cryptocurrency industry and Cipher Mining's strategic shift.
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