Cipher Mining (NASDAQ: CIFR) has sold its 49 per cent stake in several West Texas Bitcoin mining ventures to Canaan Inc. (NASDAQ: CAN) for USD$39.75 million in stock, as the company accelerates its shift toward artificial intelligence data centers and faces a reduced price target from Wall Street.
On Monday, Cantor Fitzgerald lowered its price target on Cipher to USD$24 from USD$26. However, the firm maintained its Overweight rating on the shares. The new target still implies roughly 54 per cent upside from the current price of USD$15.60. Meanwhile, independent analytics platform InvestingPro suggested the stock may already trade above fair value.
Cantor adjusted its valuation after Cipher reported fourth-quarter 2025 results. The company continues its transition away from pure Bitcoin mining. Additionally, management reiterated that construction timelines tied to its artificial intelligence data center deals remain on schedule.
Cipher expects rental payments to begin in October 2026 for initial phases. Full rent across both artificial intelligence sites should begin in February 2027. Consequently, investors now focus on longer-term contracted revenue instead of near-term mining output.
The strategic pivot follows a major agreement with Amazon (NASDAQ: AMZN) through its Amazon Web Services division. Cipher signed a 15-year deal valued at roughly USD$5.5 billion. The agreement will supply power capacity and physical space for artificial intelligence workloads. Furthermore, the company said the arrangement provides predictable cash flow once operations ramp.
However, analysts anticipate a sales decline during the transition year. Revenue from Bitcoin mining will fall as the company reallocates capital toward high-performance computing infrastructure. Meanwhile, Cipher also reported a significant quarterly net loss, reflecting lower mining revenue and higher administrative costs.
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Cipher rebrand to Cipher Digital
Needham cut its own price target on Cipher to USD$22 from USD$26. The firm maintained a Buy rating despite the earnings miss. Additionally, Citizens reiterated a Market Outperform rating with a USD$30 target. That firm pointed to the company’s pivot toward long-duration, contracted artificial intelligence revenue.
Cipher also announced it will rebrand to Cipher Digital. The new name signals a broader identity beyond cryptocurrency mining. Furthermore, the rebrand aligns with management’s plan to position the company as a scalable digital infrastructure provider.
As part of that repositioning, Cipher divested its minority stake in three joint venture mining sites in West Texas. The transaction transferred ownership interests in ABC Projects, Alborz LLC, Bear LLC and Chief Mountain LLC. Consequently, Canaan deepens its exposure to one of North America’s most active Bitcoin mining regions.
Canaan funded the USD$39.75 million purchase entirely in stock. It issued 806.4 million Class A ordinary shares, equal to about 53.8 million American depositary shares. Additionally, those newly issued shares carry a six-month lock-up restriction.
The remaining 51 per cent interest in the joint venture remains with WindHQ. Collectively, the West Texas sites operate 120 megawatts of energized capacity. They also support roughly 4.4 exahashes per second of Bitcoin mining power.
Texas has become a major hub for industrial-scale cryptocurrency mining. Companies flock to the state for relatively low power costs and deregulated energy markets. Meanwhile, operators increasingly face pressure to diversify as Bitcoin mining margins fluctuate.
Cipher shares rose 6.41 per cent following news of the transaction. Canaan shares climbed 7.95 per cent on Feb. 24. Subsequently, investors turned their attention to Cipher’s fourth-quarter earnings report released the same day.
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Firm confident in demnad for AI data center optionality
Cantor Fitzgerald said it reduced its valuation for Cipher’s Bitcoin mining operations. However, the firm maintained confidence in demand for contracted artificial intelligence data center capacity. Analysts broadly agree that the company’s future depends more on artificial intelligence infrastructure than digital asset mining.
The company’s recent moves reflect a broader industry shift. Bitcoin miners increasingly seek stable, long-term contracts in artificial intelligence and high-performance computing. Consequently, West Texas continues to evolve from a crypto stronghold into a broader digital infrastructure corridor.
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