Why Cipher Mining Stock Soared on Monday Morning
Key Points
Cipher Mining's stock jumped over 34% despite the company missing Q3 earnings and revenue estimates.
The company signed a 15-year, $5.5 billion data center agreement with Amazon Web Services for AI workloads.
The AWS deal transforms Cipher from a Bitcoin miner into an AI data center provider with crypto mining on the side.
- 10 stocks we like better than Cipher Mining ›
Shares of Cipher Mining (NASDAQ: CIFR) skyrocketed on Monday morning. The jump peaked around 10 a.m ET with a 34.6% gain. Cipher's stock cooled down somewhat to a 20.1% increase by 2:15 p.m. ET. The Bitcoin mining company published third-quarter results early in the morning, missing Wall Street's expectations across the board.
Cipher's Q3 results and a big AWS announcement
You read that right -- Cipher fell short of analysts' consensus earnings and revenue estimates, but the stock soared anyhow.
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The company's Bitcoin mining revenue nearly tripled year over year, from $24.1 million to $71.7 million. Adjusted earnings swung from a net loss of $0.01 per share to a net profit of $0.10 per share. Analysts had expected more with their average targets set at $76.5 million and $0.11 per share, respectively.
But none of that mattered, because Cipher also announced a large deal with Amazon today.
Cipher signed a 15-year deal with Amazon Web Services (AWS), offering data center space and electric power for Amazon's artificial intelligence (AI) workloads. The service will start in 2026, with the first rent payment due in August next year. The computing assets that are good for the Bitcoin mining goose are also useful to the AI-focused gander.
It's a $5.5 billion contract, stepping up the data center capacity over many years.
Image source: Getty Images.
Bitcoin miners are becoming AI landlords
Once the AWS agreement kicks in and starts to generate revenue, Cipher becomes an AI-oriented data center manager with a side gig in Bitcoin mining, instead of the other way around. It's a dramatic strategy shift, building on the earlier data center agreement with Fluidstack and Google Cloud.
I was about to say that time will tell how this shift works out in comparison to fully committed Bitcoin miners, but most of them are exploring similar AI-focused ideas at this point. It's good to see an entire industry adopting a second revenue stream that's more predictable than the original plan. Bitcoin mining is hot stuff when the crypto market is on the rise, but the less volatile AI deals should be helpful when Bitcoin prices are going down.
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Anders Bylund has positions in Alphabet, Amazon, and Bitcoin. The Motley Fool has positions in and recommends Alphabet, Amazon, and Bitcoin. The Motley Fool has a disclosure policy.
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