AI contracts, not bitcoin, now drive miner valuations, and Cipher and TeraWulf look cheap, says analyst

The sector has already become one of the market's strongest AI-related trades. Over the past year, shares of several former bitcoin miners have climbed sharply as they unveiled partnerships with hyperscalers and AI companies looking for large amounts of power and computing capacity. Still, returns have varied as investors weighed construction timelines, financing requirements and the pace of customer signings.

The broader shift reflects how many mining companies are repurposing sites with abundant power and existing electrical infrastructure for AI and high-performance computing workloads. Unlike bitcoin mining, where revenue can swing with

cryptocurrency

prices, long-term leases with investment-grade customers offer the prospect of steadier, more predictable cash flow.

Following recent pullbacks in the group, Compass Point said the market may be entering a new phase where execution matters more than announcements. As facilities come online and signed contracts begin producing revenue, the firm expects investors to focus less on future potential and more on the cash flow those projects deliver.