Cipher Digital Shares Fall 5.94% to $9.35 on Debt Concerns
Cipher Digital shares were down 5.94% at $9.35 at publication and hit a new 52-week low. Investors are concerned about debt-financed AI compute expansion; U.S. producer prices rose 1.3% in September from August, versus economists’ 0.5% forecast.
Cipher Digital Inc. (NASDAQ: CIFR) shares fell Thursday as investors focused on debt taken on by AI cloud companies to expand computing capacity. Hot inflation data also strengthened expectations for further Federal Reserve rate hikes. The pressures are weighing on AI cloud companies, with concerns about the debt required for the computing buildout resurfacing.
CoreWeave Inc. (NASDAQ: CRWV) has become a prominent example of the sector’s borrowing concerns. Its shares have faced heavy selling this week as rising bond yields intensified worries over its debt-funded growth. U.S.
producer prices rose 1.3% in September from the previous month, according to Thursday’s report from the Bureau of Labor Statistics. Economists had expected a 0.5% increase. Prices were up 6.3% from a year earlier, compared with a consensus forecast of 5.3%. Consumer and producer inflation readings this week have added to expectations for further Federal Reserve rate increases, which could put additional pressure on high-yield credit markets.
August’s upwardly revised The figure was 5.6%, making September’s annual pace the fastest since December 2022. Excluding food and energy, producer prices rose 0.7% month over month, above the 0.3% forecast, and 5% year over year, compared with 4.4% expected. Wednesday’s consumer price report also came in hotter than expected. Headline inflation increased to 3.7% from 3.4%, exceeding the 3.6% forecast.
Core consumer prices rose 0.3% for the month and 2.6% for the year, each a tenth above projections. Cipher is part of the AI cloud and data center group facing investor scrutiny over debt risk. If the Fed raises rates again, borrowing costs would increase and high-yield credit markets—where capital-intensive buildouts often seek funding—could tighten. Cautious lenders could slow projects or make them more expensive to finance.
Cipher Digital shares were down 5.94% at $9.35 at the time of publication on Thursday. The stock was trading at a new 52-week low, according to Pro. Read Also: CRWV, NBIS, IREN in Focus: Gartner Warns 80% of Neoclouds Will 'Cease Independent Operations' by 2030