Summary Cipher Mining has rallied more than 250% since I called the stock a 'hold' back in March. The company's revenue is still entirely derived from mining Bitcoin, but Cipher is preparing for leasing agreements with HPC tenants. Despite trading at multiples that are on par with companies that have already established HPC revenue sources, no such agreement exists for Cipher. I'd be very careful if I were holding CIFR shares at this juncture. I wouldn't personally be overexposed. When I last covered Cipher Mining ( CIFR ) for Seeking Alpha in March, the stock was trading under $4 per share. At that time, the company was running out of cash and looked to be battling problematic economics from mining Bitcoin ( BTC-USD ) after losing money during both 2023 and 2024. Naturally, the stock is up over 250% since my 'hold' call during the first quarter of 2025: Data by YCharts While CIFR stock did actually go down by 46% in the month following that 'hold' call, it's quite clear at this point that the bulls are completely in control of this ticker. And to be sure, most of this monster rally in CIFR has happened over the last six weeks or so. In this update, we'll look at the company's latest quarter of performance to see if fundamentals are driving this move or if it's more likely being driven by pure speculative froth. Q2-25 Earnings During the quarter ended 2025, Cipher Mining reported $43.6 million in top line revenue - all of it from mining Bitcoin. This was down sequentially from $49 million in the first quarter, but up 18.4% year over year: Data by YCharts Between April and June, Cipher mined roughly 500 BTC. The company has been quickly scaling exahash capacity over the last two months with 23 EH/s at the end of August. Cipher Monthly Production (Cipher Mining, Author's Chart) Despite nearly doubling mining capacity in Q2-25 relative to Q2-24, Cipher's raw BTC mined in the last quarter was essentially the same as it was in the two post-halving months from Q2-24. Overall, total mined BTC in the quarter was down year over year. Factoring in the increasing expenses the company is enduring quarter after quarter, Cipher's net income in Q2-25 was negative by nearly $46 million: Data by YCharts A very large part of this is the $44 million in amortization and depreciation during the quarter; which actually exceeded top line revenue during the period. COGS only grew by a modest 1.4% year over year, and gross profit surged by over 100%. At 20.8% of revenue in Q2, Cipher's SG&A expense isn't nearly as egregious as some of its Bitcoin mining-turned HPC peers. But there is no question that the company is still spending a lot of money on both network hashrate growth and on its HPC ambitions. Q2-25 was the fourth quarter out of the last five with negative operating income. Valuation At just under a $5.6 billion valuation, CIFR shares are trading at more than 31x trailing sales and more than 20x forward sales: Seeking Alpha In the past, one of the metrics that I've liked to look at when valuing a Bitcoin mining company is the price-to-annualized sales over a three-month average BTC-mined metric. This still works for CIFR because despite the plans for HPC revenue in the future, the company is still generating revenue entirely from mining. Over the last three months, Cipher is averaging 203 BTC in monthly production. So if we build a forward sales multiple based on that level of production, this is how the P/S table breaks out by price per coin: BTC Based FWD Sales Table CIFR Market Capitalization $5,560,000,000 3 Month Avg Production (June-August) 203 FWD P/S At $100k BTC 22.82 FWD P/S At $150k BTC 15.22 FWD P/S At $200k BTC 11.41 Source: Analyst's calculation Even at a $150k BTC price, CIFR stock is trading at 15x forward sales. This is an aggressive valuation in my view. Especially considering BTC is actually far closer to $100k than $150k per coin at this point in time. At the lower end price, CIFR is trading at 23x forward sales. HPC Deal Hype Despite being the only way Cipher currently generates revenue, I would argue the stock is not being valued based on its Bitcoin mining footprint. Compared with mining peers, the chart below shows the P/S multiples for CIFR, MARA Holdings ( MARA ), IREN Limited ( IREN ), and TeraWulf ( WULF ): Data by YCharts MARA is the one that I believe the market views as a Bitcoin mining stock in the more traditional sense. The other three are viewed as HPC/AI companies, and to no surprise, those three trade at significant P/S multiples over MARA, with CIFR actually being valued higher than IREN. We already saw a little over a month ago that Bitcoin miners that have pivoted to prioritizing HPC services can generate interest from important AI-related companies. Back in August, TeraWulf announced backing from Google (GOOGL) ( GOOG ) less than 24 hours after I called the company a 'sell.' That stock has subsequently doubled. These things happen. The point I'm ultimately trying to illustrate here is CIFR is now trading at the same multiple as WULF even though it lacks the financial backing that has propelled those shares higher. In conjunction with Q2 earnings, Cipher CEO Tyler Page was quoted with the following: In the long run, we expect this site to be fully leased by HPC tenants. By taking this approach to building infrastructure today, we will be prepared to sign tenants when they are ready, while also preserving our flexibility to use the space for bitcoin mining in the near term, if preferred. While there is definitely sentiment on platforms like X that shareholders believe an HPC deal is coming. At least so far, Cipher has yet to land a lease agreement. Summary While I certainly have no interest in getting TeraWulf'ed again - which is to say calling the stock a 'sell' only to immediately eat my words - I would be pretty cautious if I were holding CIFR stock at this point. The company's actual revenue breakout is reminiscent of a Bitcoin mining pure play, but its valuation is on par with companies that are already generating revenue from HPC/data center services. This is despite the fact that there is no tenant or lease agreement yet. To be sure, that could certainly change. But why pay today for a deal that might not actually happen?
