Cipher Digital (CIFR) Stock Sinks 20% as Texas Elects a Data Center Critic

TLDR

• CIFR fell nearly 19% to about $6.60 on Nov. 4 after Gina Hinojosa won the Texas governor’s race.
• Gov. Greg Abbott had already frozen data center permits on Sept. 21.
• Hinojosa’s moratorium plan covers new data centers only.
• Cipher missed Q3 revenue estimates but booked its first HPC lease revenue.
• Analysts cut price targets, though Wells Fargo, Needham, Cantor and Rosenblatt kept positive ratings.

Cipher Digital (CIFR) stock dropped nearly 19% to about $6.60 on Nov. 4. The move came a day after Democrat Gina Hinojosa won the Texas governor’s race.

Cipher Mining Inc., CIFR

By 12:18 p.m. EST, a delayed quote showed $6.465, down 20.38%. The stock had traded as low as $6.18.

Texas was already tightening the rules before the vote. On Sept. 21, Gov. Greg Abbott told state environmental regulators to halt data center permits pending audits.

Abbott also required projects to cover electrical infrastructure costs and report power and water use. His office said it would work with lawmakers to end financial incentives next session.

Hinojosa beat Abbott, and the Associated Press called the race for her. Her campaign wants a moratorium on new data centers until lawmakers set community protections.

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She also asked Abbott to issue an executive order and call a special session. The goal is to end tax incentives for the industry.

Her plan covers new data centers only. It does not ban bitcoin mining or close existing sites.

Wall Street Reacts

Dan Ives of Yorkville Ives & Co said the vote will “slow the pace” of data center buildouts nationwide. Wells Fargo’s Ohsung Kwon had flagged a Democratic Texas win as a possible shock for AI stocks.

Trader Urkel said CIFR was up about 18% on Tuesday before sliding by a similar amount. “Some of these roller-coaster moves are insane,” he wrote.

Another trader, The Great Mattsby, said he wants to buy at $5.91. That level sits below Wednesday’s prices.

Analysts also trimmed targets after earnings. Wells Fargo’s Eric Luebchow kept Overweight but cut his target from $25 to $15.

Needham and Cantor Fitzgerald cut to $15, and Rosenblatt to $19. All three kept positive ratings, and the average target is $26.61.

Inside Cipher’s Q3 Report

Cipher reported revenue of $26.7 million on Nov. 2, below the $38.47 million analysts expected. That was 62.8% lower than a year earlier.

The total included $5.852 million from its first HPC lease payments at Black Pearl. Bitcoin mining brought in $20.849 million, down from $71.707 million.

Cipher logged a $71.9 million operating loss. A $127.2 million warrant gain lifted net income to $31.6 million.

ERCOT gave 1 GW at Colchis a conditional base load classification. Another 1.6 GW received conditional studied load classifications.

The Barber Lake lease now runs 20 years, with about $9.1 billion in contracted revenue. Cipher’s pipeline stands at 5.9 GW, and it has begun developing gas pipelines for up to 2.5 GW of on-site power.

Riot, also active in Texas, disclosed a 15-year, $28 billion lease at Corsicana covering 910 MW. Average annual rent is estimated at $1.8 billion.

Benzinga’s latest quote showed CIFR down 20.69% at $6.43, close to its 52-week low of $6.62.