Cipher Mining Inc. (CIFR) is having quite the Thursday. After riding the AI wave to new highs and then cooling off in recent sessions, the data center developer is back with a vengeance on news that checks every box investors want to see: massive contracted revenue, a decade-long commitment, and Google's name on the paperwork.
The Deal That Changed Everything
Cipher announced Thursday morning that it signed a 10-year high-performance computing colocation agreement with Fluidstack, an AI cloud platform that builds and operates HPC clusters. The headline number? An additional 39 MW of critical IT load at Cipher's Barber Lake site in Colorado City, Texas, translating to approximately $830 million in contracted revenue over the initial term.
But wait, there's more. The agreement includes two five-year extension options that would push total contracted revenue to roughly $2 billion if exercised. And here's the kicker: Google is backstopping an additional $333 million of Fluidstack's lease obligations to support project-related debt. When Google opens its wallet to support your infrastructure buildout, people notice.
"We're excited to expand our partnerships with Fluidstack and Google as we develop the remaining current capacity at our Barber Lake site," said Tyler Page, CEO of Cipher. "This third transaction further validates Cipher's position as a leader in HPC development and underscores the strong momentum that will continue to drive growth across our pipeline of sites."
Riding Nvidia's Coattails
The timing couldn't be better. Cipher shares had already gotten a boost Wednesday evening after Nvidia reported earnings that crushed expectations and offered guidance that made even the bulls do a double-take. Nvidia beat analyst estimates on both revenue and earnings in the third quarter, and its forward outlook topped the most optimistic forecasts on the Street.
"The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once," Nvidia CEO Jensen Huang said in the report.
That enthusiasm lifted several AI-linked stocks that benefit from Nvidia's ecosystem, and Cipher was no exception. Data centers powering AI workloads are in hot demand, and Cipher is positioning itself right in the middle of that buildout.
Financing The Future
In connection with the announcement, Cipher said it plans to offer $333 million of 7.125% senior secured notes due 2030 in a private offering to institutional investors. The company expects to use the proceeds to finance construction costs for additional facilities at Barber Lake.
Cipher shares were up 18.83% at $16.35 Thursday, bouncing back after recent weakness as several AI momentum names cooled off following strong runs in recent months.