---
title: "Cipher Digital booked $5.85 million of first AI rent against $6.7 billion of debt"
description: "Cipher's first quarter booking HPC rent produced $27 million of revenue and negative $10 million of adjusted EBITDA, against $16.6 billion of contracted leases and $6.7 billion of debt. Analysts cut their targets on November 3 and kept calling the shares undervalued; both halves are right."
publisher: "The Inference"
section: "Data Center"
published: 2026-11-04T18:10:22.988Z
modified: 2026-11-04T18:10:22.988Z
canonical: https://theinference.org/article/cipher-digital-booked-5-85-million-of-first-ai-rent-against-6-7-billion-of-debt
language: en
keywords: "Cipher Mining, AI Data Centers, HPC Leasing, Convertible Debt, Analyst Calls"
---

# Cipher Digital booked $5.85 million of first AI rent against $6.7 billion of debt

> Cipher's first quarter booking HPC rent produced $27 million of revenue and negative $10 million of adjusted EBITDA, against $16.6 billion of contracted leases and $6.7 billion of debt. Analysts cut their targets on November 3 and kept calling the shares undervalued; both halves are right.

[Cipher Digital](https://theinference.org/markets/companies/cipher-mining)'s first quarter as a landlord is on the record, and it is thin: revenue of $27 million, adjusted EBITDA of negative $10 million, and the first $5.85 million of high-performance-computing rent, booked after tenants began paying at the Black Pearl campus [1][2]. Behind those small numbers sit two large ones. Roughly $16.6 billion of contracted rent sits in signed leases averaging 17.3 years, which management pegs at about $864 million of average annualized net operating income [2].

And roughly $6.7 billion of debt stands in front of a market capitalization of about $3.5 billion [2]. The shares, [down about 68 percent](https://www.ainvest.com/news/cipher-digital-fell-60-wall-street-calls-undervalued-gap-contract-cash-2611/) from a late-July close near $22.66 to $6.86 on November 2, sit under both numbers [2][3].

## The mining era is winding down on the income statement

The company used to be Cipher Mining, a bitcoin miner, and the filings show the pivot in real time. Mining-era revenue peaked at $71.7 million in the third quarter of 2025 and fell to $24.8 million by the second quarter of 2026, before the landlord quarter lifted the total back to $27 million, with $5.85 million of it, the first HPC rent ever booked, coming from leases rather than machines [1][6]. The replacement business leases campuses to AI labs and hyperscalers for up to two decades at a time.

*Chart: **Cipher's revenue bottomed at $24.8M, then the first rent arrived** Cipher quarterly revenue, Q1 2024 through Q3 2026*

*Quarterly total revenue in US$ millions. Q1 2024 through Q2 2026 from SEC filings via company_series; Q3 2026 of $26.7 million, including $5.85 million of first HPC leasing revenue, from Cipher's third quarter 2026 business update. Sources: [1][6]. [1][6]*

## The contract got bigger, and so did the bill

The promise grew this quarter. [An amended Barber Lake lease](https://bakercapitalstrategies.com/press-releases/0001819989-26-000047-2/cipher-digital-provides-third-quarter-2026-business-update) adds a second ten-year term directly with a leading AI lab, lifting contracted revenue at that site to about $9.1 billion, including $5.2 billion of incremental rent, and restoring projected yield on cost to about 15 percent from about 13 percent [1][3]. But the same tenant's design changes pushed Barber Lake's expected cost to about $13 million per critical IT megawatt from about $10.4 million, with $409 million of change orders of which the tenant reimburses only about $50 million [2][3].

## More debt now stands in front of the equity

Total borrowings sit near $6.7 billion, including about $4.5 billion of non-recourse project notes and $2.2 billion of parent-level convertibles, against that $3.5 billion market capitalization; adding the debt takes enterprise value to roughly $8.4 billion, the number the leases must justify [2].

In October Cipher [sold $850 million of 0.000% convertible notes due 2032](https://www.tradingview.com/news/tradingview:e178a439ba331:0-wells-fargo-maintains-cipher-digital-at-overweight-lowers-price-target-to-15-from-25/), priced to convert at $15.31 with capped calls lifting the effective conversion price to $28.35, and swapped $165.9 million of 1.750% notes into about 40.7 million shares, adding more than 10 percent to the share count [1][2][3]. The new money pays no interest unless the stock more than doubles from here.

*Chart: **Cipher owes $6.7B behind a $3.5B market cap** Bars comparing Cipher's total debt, market capitalization and enterprise value*

*US$ billions as reported in November 2026: about $6.7 billion of total debt, of which $4.5 billion non-recourse project notes and $2.2 billion parent-level convertibles; market capitalization about $3.5 billion; enterprise value about $8.4 billion. Source: [2]. [2]*

## The sell-side analysts cut targets and kept the buys

On November 3 the banks covering Cipher, sell-side analysts at JPMorgan, [Wells Fargo](https://theinference.org/markets/companies/wells-fargo), Needham, Cantor Fitzgerald and Rosenblatt, [cut their price targets while keeping buy ratings](https://finance.yahoo.com/markets/stocks/articles/bernstein-cuts-cipher-price-target-183124938.html): [JPMorgan](https://theinference.org/markets/companies/jpmorgan-chase) to $18 from $22, Wells Fargo to $15 from $25, Rosenblatt and Cantor to $19 and $15 [3][4][5]. Bernstein, another covering firm, cut to $23 from $32 after raising its cost of capital to 15 percent, the discount rate it applies to future cash flows [3].

*Chart: **Every covering bank cut its Cipher target on November 3, all well above $6.86** Range chart of Cipher price targets before and after the November 3 cuts*

*Price targets in US dollars, before and after the November 3 cuts. Rosenblatt and Cantor Fitzgerald set new targets of $19 and $15 without published prior levels in the cited reports. Sources: [3][4][5]. [3][4][5]*

Its own arithmetic shows why the disagreement is narrow: the contracted campuses imply a cap rate, the annual income a property yields on its total cost, of about 11 percent, against 5 to 7 percent for established data-center REITs [3].

[Barber Lake and Black Pearl deliveries](https://theinference.org/article/cipher-s-first-barber-lake-rent-decides-between-wells-fargo-s-25-and-morgan-stanley-s-51-50) in the first quarter of 2027 are the dated test of whether that $864 million a year arrives as cash or stays as paper [2][3]. Until then the record offers a choice between two true numbers: a $3.5 billion market capitalization owning $16.6 billion of contracts, and an $8.4 billion enterprise value that owes the debt before shareholders see any of it [2].

## Takeaway

Cipher's $16.6 billion of contracted leases are real, but $6.7 billion of debt and negative adjusted EBITDA stand in front of a $3.5 billion equity until Barber Lake and Black Pearl deliver in early 2027.

## Sources

1. [Cipher Digital Inc., Third Quarter 2026 Business Update press release, 2 November 2026](https://bakercapitalstrategies.com/press-releases/0001819989-26-000047-2/cipher-digital-provides-third-quarter-2026-business-update)
2. [AInvest, Cipher Digital Fell ~60% While Wall Street Calls It Undervalued, 4 November 2026](https://www.ainvest.com/news/cipher-digital-fell-60-wall-street-calls-undervalued-gap-contract-cash-2611/)
3. [Yahoo Finance (William Foxley), Bernstein cuts Cipher price target to $23 from $32 on higher cost of capital, keeps Outperform, 3 November 2026](https://finance.yahoo.com/markets/stocks/articles/bernstein-cuts-cipher-price-target-183124938.html)
4. [TradingView, Wells Fargo maintains Cipher Digital at Overweight, lowers price target to $15 from $25, 3 November 2026](https://www.tradingview.com/news/tradingview:e178a439ba331:0-wells-fargo-maintains-cipher-digital-at-overweight-lowers-price-target-to-15-from-25/)
5. [TradingView, JP Morgan maintains Cipher Digital at Overweight, lowers price target to $18 from $22, 3 November 2026](https://www.tradingview.com/news/tradingview:d2700a0844f47:0-jp-morgan-maintains-cipher-digital-at-overweight-lowers-price-target-to-18-from-22/)
6. [Cipher Mining, quarterly figures from SEC filings, retrieved via company_series, 4 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001819989)


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Cipher Digital booked $5.85 million of first AI rent against $6.7 billion of debt — The Inference. Canonical: https://theinference.org/article/cipher-digital-booked-5-85-million-of-first-ai-rent-against-6-7-billion-of-debt