Keefe Bruyette lowered price targets on seven bitcoin miners and AI hosting companies on Monday.

  • Keefe Bruyette said AI colocation fundamentals remain attractive but that valuation discipline is increasingly important.
  • The firm said miners are trading near or below estimated contracted lease values.
  • It kept ‘Outperform’ ratings on six of the seven stocks and ‘Market Perform’ on Keel Infrastructure.

Cipher Digital (CIFR) shares took the biggest price-target cut on Monday in a sector-wide reset by Keefe Bruyette, which flagged valuation risks across Bitcoin miners-turned-AI hosting companies despite the appeal of leasing data-center capacity to AI customers.

CleanSpark (CLSK), Riot Platforms (RIOT), Hut 8 (HUT), TeraWulf (WULF), Core Scientific (CORZ) and Keel Infrastructure (KEEL) also saw their price targets trimmed, according to TheFly. However, even after the cuts, the new targets sit above Friday’s closes for each stock.

CIFR, CLSK Stocks Face Steepest Cuts in AI Infrastructure Reset

Keefe Bruyette kept ‘Outperform’ ratings on six of the seven stocks, and kept a ‘Market Perform’ rating on Keel. Both CLSK and CIFR saw their price targets cut by more than 50%. 

The firm cut its price target on Cipher Digital to $11 from $28, a drop of around 61%, and slashed its price target on CleanSpark to $11.50 from $25, a cut of around 54%. 

CLSK stock rose 2.3%, and CIFR stock gained 2.8% in pre-market trade as Bitcoin (BTC) recovered to above $77,500 after falling to around $76,000 on Friday. Most crypto-related stocks traded higher, with Coinbase (COIN) the exception after a Morgan Stanley downgrade.

On Stocktwits, retail sentiment around CLSK dipped to 'extremely bearish' from 'bearish' territory over the past day, while sentiment around CIFR fell to 'neutral' from the 'bullish' zone.

New Lease Deals, Project Financing Are Key Tests

Keefe Bruyette said the stocks are trading near or below its estimates of the value of their contracted leases. That leaves less room for error if projects cost more to build or take longer to generate revenue.

The firm said investors need greater clarity on construction costs and how companies plan to finance new projects. Upcoming project financings will be important tests of whether the companies can secure the capital needed to deliver their planned data-center capacity.

Keefe Bruyette also warned that a potential ‘lease catalyst drought’ through early 2027, along with regulatory uncertainty in Texas, could weigh on investor sentiment.

Bitcoin mining stocks’ price performance year-to-date price change on October 2 as of 6:30 a.m. ET| Source: Koyfin

The price-target cuts follow a volatile year for the group. All seven stocks rallied from April into early June before giving back much of their gains. Hut 8 remained up about 29% for the year, while Cipher was down roughly 51%.

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