Cipher slides 16% on wider Q2 losses as Bernstein sees upside from Texas power audit

Cipher Digital (CIFR) shares fell 15.7% on Tuesday after the bitcoin (BTC) miner reported wider losses in the second quarter of this year.

The bitcoin miner-turned-HPC developer posted a net loss of $267.5 million in the second quarter, more than five times the loss it registered a year ago, according to its Q2 report released Tuesday. It posted $24.8 million in revenue in the quarter, down from $43.6 million in Q2 2025.

The company also said that it delivered its first Black Pearl data center capacity at the beginning of August, roughly two months ahead of schedule.

"A core strength of our strategy is its repeatability, and in the second quarter, we demonstrated that once again," said Tyler Page, CEO of Cipher. "We accessed capital markets to fund another one of our leases, secured an option on a new site, and delivered accelerated capacity to our tenant, further building our position as a leading HPC development platform."

Despite the weaker quarterly results, Bernstein analysts reiterated their "Outperform" rating for Cipher in a Wednesday note to clients, saying execution remains on track across the company's three contracted data center projects with full delivery expected by the first half of 2027.

Bernstein also maintained its $32 price target, indicating an upside of 57%. Cipher shares closed at $20.38 on Tuesday, according to The Block's CIFR price page.

Texas audit

Bernstein also said a new Texas initiative could ultimately benefit established bitcoin miners and HPC developers such as Cipher.

On Monday, Texas Governor Greg Abbott directed the Public Utility Commission of Texas and grid operator ERCOT to audit all data center projects currently in the state's interconnection queue, prompting ERCOT to pause its "Batch Zero" process. The process was set to classify the first group of large electricity users later this month. 

According to Bernstein, the move is likely to curb speculative data center development, increase the scarcity value of already-approved power capacity, and boost existing bitcoin miners and AI operators.

"We believe the new Texas directive could push out the Batch Zero pipeline conversion by a few months, however it ultimately benefits credible developers like Cipher by decongesting the grid queue from speculative burden," the analysts said Wednesday.

Like several other bitcoin miners, Cipher has been pivoting away from a pure-play mining business toward leasing data center capacity to AI and cloud providers. The company held $37.8 million worth of bitcoin at the end of June, compared to $125.4 million at the end of last year.