Cipher Digital Inc. (NASDAQ:CIFR) stock got clobbered Thursday, plunging nearly 12% to a fresh 52-week low as fears about artificial intelligence spending and financing rippled through the technology sector.

The broader market wasn't exactly a safe harbor either. The Nasdaq fell 2.71%, while the S&P 500 declined 1.27%.

AI Spending Worries Weigh on Cipher Digital

Cipher Digital tumbled alongside other AI infrastructure stocks as investors questioned the enormous capital needed to sustain the industry's rapid expansion.

On CNBC Thursday, NVIDIA Corp. (NASDAQ:NVDA) CEO Jensen Huang said demand for AI cloud services remains exceptionally strong. But there's a catch: limited working capital is putting a lid on growth.

Huang noted that demand for financing continues to outpace available capital across the AI industry. That's a fancy way of saying the AI boom needs a lot of money, and right now there isn't enough to go around.

Tech Leads Market Declines

Technology was Thursday's worst-performing sector, falling 3.15%. Meanwhile, investors fled to defensive stocks, lifting consumer staples by 2.78% and utilities by 1.56%.

Cipher Digital, which develops and operates high-performance computing data centers, remains particularly sensitive to shifts in AI infrastructure spending and financing conditions. The stock also underperformed the broader technology sector, reflecting heightened selling pressure.

Technical Analysis: Deeply Oversold

Cipher Digital shares traded 37.5% below their 20-day simple moving average (SMA) of $12.94 and 55.1% below their 200-day SMA of $18.02.

The 50-day SMA of $15.24 remains below the 200-day average, reinforcing the bearish trend.

Meanwhile, the relative strength index (RSI) stood at 20.44, signaling deeply oversold conditions. While that raises the possibility of a short-term rebound, selling pressure remains intense.

The previous 52-week low of $8.23 is now a potential resistance level, while the 20-day SMA at $12.94 presents another hurdle.

Earnings and Analyst Outlook

Cipher Digital is scheduled to report third-quarter results on Nov. 2.

Analysts expect a loss of 26 cents per share on revenue of $38.13 million, compared with year-earlier revenue of $71.71 million.

The stock carries a Buy consensus rating and an average analyst price forecast of $28.50.

Cantor Fitzgerald recently maintained its Overweight rating but lowered its price forecast to $19. Morgan Stanley also kept its Overweight rating while reducing its forecast to $51.50. UBS initiated coverage with a Buy rating and a $23 forecast.

CIFR Price Action

Cipher Digital shares fell 11.71% to $8.06 at the time of publication Thursday, marking a new 52-week low, according to market data.