Cipher Mining Inc. (CIFR) shares surged Monday after getting a meaningful vote of confidence from Wall Street. JPMorgan upgraded the stock from Neutral to Overweight and bumped its price target from $12 to $18, a sign the bank is buying into the Bitcoin miner's transformation story.

The Bitcoin Mining Pivot

Here's the bigger picture: JPMorgan thinks long-term high-performance computing deals are proving that Bitcoin miners can successfully pivot into data-center operators, according to Investing.com. And the data backs it up. Since late September, deal activity has exploded, with IREN and Cipher alone signing more than $19 billion in combined contracted revenue through long-duration cloud and colocation agreements.

The analysts expect miners to shift roughly 1.7 gigawatts of critical IT capacity to HPC uses by late 2026. That's about 35% of their approved power base, a substantial reallocation. Cipher stands out as one of the strongest players, having already locked in about 600 megawatts of gross capacity with tenants including AWS and Fluidstack.

Valuation Gets a Fresh Look

JPMorgan didn't just upgrade the rating. The firm also raised its valuation estimates for HPC capacity after cutting discount rates in its cloud and colocation models. They now value a megawatt of critical IT colocation capacity at $8 million to $17 million, with integrated cloud capacity reaching up to $19 million.

Despite the recent rally, Cipher's stock remains roughly 45% off its recent highs. JPMorgan sees room for additional upside, especially if the company signs more agreements at sites like the 100-megawatt Stingray project.

Price Action: At the time of writing, Cipher shares were trading 16.64% higher at $16.52.