What Would Rising Building Costs Do To Cipher Digital Stock?
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Cipher Digital (CIFR) stock has lost 68.6% over the past year, compared with a 13.7% gain for the S&P 500. Investors now hold a company borrowing heavily to build data centers. Construction has already cost more than planned at the Barber Lake campus. During the November 2, 2026 call, management said it expects labor costs to keep rising in 2027. So how much more is Cipher already paying to build?
How Much More Is Cipher Paying At Barber Lake?
Management said on the November 2 call that the tenant’s requirements changed during construction, producing about $409 million of change orders that the lease made the tenant’s responsibility. Cipher agreed to carry $359 million of that itself in return for a longer lease, with the tenant repaying the rest. The two are also splitting higher construction costs equally, and Cipher pays the tenant’s half and recovers it through rent over the life of the lease.
What Higher Costs Would Mean For Cipher’s Cash
Because its own operations are not paying for the building, rising costs would fall first on the money Cipher has to raise. Over the twelve months to September 30, 2026, Cipher’s capital spending reached $2.7 billion while its operations used cash, so it spent far more than it took in.
Cipher’s $359 million share of the Barber Lake change orders equals more than half of the $656 million in cash it held at the end of September. Management said Cipher paid for it with part of the $850 million of convertible senior notes it sold in October. Each further rise in building costs would add to debt that already equals about twice Cipher’s market value, against about a fifth for the S&P 500. That ratio uses September debt; management said total debt reached about $6.7 billion after the October notes. In the 2025 tariff shock, Cipher stock fell 65%, against 19% for the S&P 500.
What Cipher Has Lined Up Against Rising Costs
Cipher’s main protection is its tenants. On the November 2 call, management said these clients have so far been willing to raise rent in line with higher financing costs, and they are increasingly open to covering building costs ahead of time. For new projects, Cipher now works out 30% to 60% of the design before signing a lease, so that it faces fewer change orders later.
Cipher has leased its three contracted campuses for a weighted average term of 17.3 years. Management puts the revenue contracted under them at about $16.6 billion. The October notes carry a 0% coupon, so Cipher pays no interest on them. Still, the company recorded $218 million of interest expense over the twelve months to September 30, against an operating loss of $437 million, so its operations do not yet cover its interest.
When Will Cipher’s Holders Know More About Costs?
Management said Barber Lake’s data halls will be delivered from the fourth quarter of 2026 through the first quarter of 2027, and that construction remains on schedule. Management also expects a final classification for Colchis, its 1 GW site, in December 2026, and is in discussions with several possible tenants there. Colchis already holds a conditional base load designation, and December would make it final. Cipher’s capital spending, against its cash from operations, is the figure to watch in its next report, expected in February 2027.
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