Artificial intelligence (AI) has produced some of the most compelling stocks over the past decade. Nvidia is the biggest stock in the industry and has gained 1,400% over the past five years. Sandisk has surged by more than 3,000% over the past year.
If you are looking for under-the-radar picks, you might want to start with Cipher Digital (NASDAQ: CIFR), which rebranded in February 2026 from Cipher Mining to Cipher Digital and is up 40% so far this year as of Thursday morning. The company that started with Bitcoin mining now develops AI data centers and signs long-term deals with tech giants, and serves as a fundamental part of AI infrastructure.
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Predictable revenue and scalability
Cipher Digital makes money by building AI data centers and securing long-term contracts. The more gigawatts of power it accumulates, the more deals it can sign.
In March, the company signed its third AI data center campus lease with what it called an “investment-grade hyperscale tenant,” showing that Cipher Digital can quickly turn AI data center capacity into new customers. It is a 15-year lease for an undisclosed sum, but a previous deal with Amazon hints at Cipher Digital’s long-term potential.
Last year, Cipher Digital secured a 15-year, $5.5 billion deal to supply Amazon with 300 megawatts of capacity. That comes to $367 million per year in revenue. The company has 4.2 gigawatts of capacity in its portfolio, which means it could support 14 deals like the Amazon contract once those AI data centers are operational. It currently has 907 megawatts of operating and contracted capacity.
Cipher Digital has lower costs than top competitors
Cipher Digital isn’t the only company that is building AI data centers. Iren and Nebius are two of the largest companies in this industry. However, Cipher Digital has an advantage over them as it doesn’t have to spend as much money on each of its data centers as Iren and Nebius.
The difference comes from Cipher Digital’s landlord model. It provides the AI data centers, land, and power. Customers must bring their own AI chips to the locations. Iren and Nebius spend extra money on AI chips for their facilities. While Cipher Digital has lower contract values than Iren and Nebius for the same energy, it can deploy AI data centers faster.
More gigawatts will go online soon
AI data center providers aim to secure energy and bring it online as quickly as possible. Once a site is energized, it can generate revenue. Cipher Digital has demonstrated that customers will sign long-term contracts before AI data centers are fully energized, but those contracts only translate into revenue once the data centers are up and running.
Cipher Digital’s first-quarter presentation shows that it plans to have 270 megawatts of energy ready to go in 2027. However, the big time frame is 2028 to 2029, when the company expects to energize 2.5 gigawatts. One gigawatt is 1,000 megawatts.
The gigawatt pipeline shows the long-term potential of Cipher Digital stock. On the surface, the company’s 29% year-over-year revenue decline in Q1 doesn’t look good. However, the company still generates all of its revenue from crypto mining.
Cipher Digital is expected to start making money on the Amazon contract this August, and revenue growth is poised to scale rapidly once the company energizes more of its sites. Shares are up 440% over the past year. However, the real gains may still be in store as the company turns contracts into long-term recurring revenue.
Cipher Digital may have lower contract values than Iren and Nebius, but it also has a smaller mountain to climb. Lower costs and fewer steps in its AI data center process can help Cipher Digital get sites up and running faster than its competitors, and this could help the stock outperform the S&P 500 in the years to come.
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Marc Guberti has positions in Cipher Mining and Iren. The Motley Fool has positions in and recommends Amazon, Bitcoin, and Nvidia. The Motley Fool has a disclosure policy.
1 Artificial Intelligence (AI) Stock Flying Under the Radar That I Think Every Investor Should Consider was originally published by The Motley Fool
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: finance.yahoo.com
