Morgan Stanley has initiated research coverage of Cipher Mining (NASDAQ:CIFR), assigning an Overweight rating and a price objective of $38.00, compared with the stock's most recent trade at $14.73. That $38.00 target lies well below the Street's top projection of $53, yet it sits considerably above the low estimate of $18, according to InvestingPro data.
In its report, Morgan Stanley evaluates Bitcoin miners not purely as speculative cryptocurrency plays but through an infrastructure lens - particularly for those operators that have established data centers under long-term contracts with creditworthy counterparties. The bank argues these contracted facilities should appeal to infrastructure investors who prioritize predictable, long-duration cash flows over exposure to Bitcoin price moves.
To illustrate the framework, Morgan Stanley draws parallels between Cipher's operating model and the business profiles of data center REITs such as Equinix and Digital Realty, which trade at valuation multiples above 20x EV/FY1 EBITDA. The report, however, cautions that Bitcoin mining companies' data centers are unlikely to fetch identical multiples, given a more constrained growth runway for those assets.
The firm characterizes its valuation thesis as a "REIT endgame," contending that contracted data centers built by Bitcoin miners should ultimately be owned by REIT-like investors that price long-term, low-risk contracted cash flows appropriately. That language frames the bank's expectation that certain miners could transition toward investor bases that value stable, infrastructure-style revenue streams.
Separately, Cipher Mining has moved forward with financing and leadership changes. Its subsidiary, Black Pearl Compute LLC, priced a $2.0 billion issuance of 6.125% senior secured notes due 2031. The offering is intended to fund the remaining construction costs of the Black Pearl Facility in Wink, Texas, and to reimburse Cipher Mining for approximately $232.5 million in prior equity contributions. The proceeds will also be used to support debt service reserves and to pay related fees and expenses.
Cipher has also strengthened its management ranks with two appointments. Lee Bratcher has been named Head of Policy and Government Affairs; Bratcher's background includes work with the Texas Blockchain Council where he engaged with policymakers and industry leaders. Drew Armstrong joins as Head of Strategic Initiatives.
The moves come as shares of Cipher and other publicly traded Bitcoin miners have been pressured by a wider sell-off in the cryptocurrency market, with notable declines reported across the group. Cipher's strategic actions - financing the Wink facility, reimbursing prior equity, and adding policy and strategic leadership - signal a focus on the company's infrastructural buildout and on navigating the volatile crypto environment while pursuing contracted, long-duration cash flow opportunities.
Summary
Morgan Stanley initiated coverage on Cipher Mining with an Overweight rating and a $38.00 price target, viewing contracted Bitcoin data centers as infrastructure assets that could attract REIT-like investors. Cipher priced a $2.0 billion offering of 6.125% senior secured notes due 2031 to fund construction of the Black Pearl Facility in Wink, Texas, reimburse about $232.5 million of prior equity contributions, and support reserves and expenses. The company also appointed Lee Bratcher as Head of Policy and Government Affairs and Drew Armstrong as Head of Strategic Initiatives amid a broader cryptocurrency market sell-off.