Cipher Digital Inc. (NASDAQ:CIFR) shares are plunging Wednesday as Democratic midterm victories fueled concerns that tighter regulation could delay data center construction and slow AI infrastructure growth.
- Cipher Digital stock is testing lower boundaries. What’s pressuring CIFR?
Cipher Stock Drops On Election Fears
Cipher is sinking Wednesday with the wider group of AI cloud and data center companies. Democrats picked up major wins in the elections, and traders are betting that added rules and approval hurdles will postpone data center builds and put a brake on AI infrastructure growth. CNBC says Democrats are regarded as supportive of pauses on building data centers.
The Texas outcome rattled investors most. Democrat Gina Hinojosa defeated Gov. Greg Abbott, the Republican incumbent, after campaigning for tougher curbs on data centers and a statewide moratorium taking effect immediately.
Yorkville Ives & Co partner Dan Ives predicted Wednesday that the vote will “slow the pace” for data center buildouts nationwide. Earlier this week, Ohsung Kwon, Wells Fargo’s equity strategist, flagged Democrats taking Texas as a possible severe shock for AI stocks.
Analysts Trim Cipher Targets Despite Bullish Views
The slide follows a bounce Tuesday, after analysts reviewed Cipher’s third-quarter report. Wells Fargo’s Eric Luebchow stayed at Overweight but lowered the target from $25 to $15, saying the trade-off between risk and return still looks attractive.
Other firms moved the same way. Needham and Rosenblatt kept Buy ratings while cutting targets to $15 and $19, and Cantor Fitzgerald trimmed to $15 with an Overweight rating. The average target among analysts is $26.61.
Third-quarter sales of $26.701 million came in well under the $38.47 million analysts projected and sat 62.8% below the year-earlier quarter, because the bitcoin mining business is shrinking.
CIFR Shares Are Tumbling
CIFR Price Action: Cipher shares were down 20.69% at $6.43 at the time of publication on Wednesday. The stock is trading near its 52-week low of $6.62, according to Benzinga Pro.
Image: T. Schneider/Shutterstock
Recent Comments