Cipher Digital Inc. (NASDAQ:CIFR) stock jumped nearly 11% in Friday's premarket trading as technology stocks rebounded from a sharp selloff.
Nasdaq futures rose 1.84%, while S&P 500 futures gained 0.42%, signaling stronger investor appetite for risk.
The rally comes despite continued technical weakness in Cipher Digital shares.
Cipher Digital operates data centers designed for high-performance computing (HPC) workloads.
The company's exposure to artificial intelligence infrastructure makes it sensitive to changes in demand for computing power and data center capacity.
Revenue Plunges As AI Expansion Accelerates
Cipher Digital reported disappointing third-quarter results Monday, with revenue falling 62.8% year over year to $26.7 million, missing Wall Street's $38.47 million estimate.
The company posted a loss of 22 cents per share, matching expectations.
However, Cipher generated its first $5.85 million in high-performance computing (HPC) leasing revenue as operations began at its Black Pearl facility.
The company also expanded its Barber Lake lease agreement, raising total contracted revenue to approximately $9.1 billion.
Meanwhile, Cipher's AI infrastructure development pipeline reached 5.9 gigawatts, reflecting its growing focus on data center expansion.
Technical Analysis
Cipher Digital remains in a bearish trend despite Friday's rebound.
The stock trades 30.1% below its 20-day simple moving average (SMA) of $8.88 and 64.6% below its 200-day SMA of $17.52.
Moreover, a death cross formed in September when the 50-day SMA fell below the 200-day SMA. This pattern signals continued long-term weakness.
However, the relative strength index (RSI) stands at 26.39, indicating oversold conditions. That could support a short-term recovery.
The stock's 52-week range spans $5.07 to $30.14.
Immediate resistance sits at $8.88, while support remains near $5.07. A sustained recovery above the 20-day SMA could signal improving momentum.
Analyst Outlook
Cipher Digital stock carries a consensus Buy rating and an average price forecast of $25.43.
However, several analysts recently lowered their forecasts.
Bernstein cut its price forecast to $23 on Nov. 4, while JPMorgan reduced its forecast to $18 on Nov. 3. Wells Fargo also lowered its forecast to $15 on Nov. 3.
All three firms maintained positive ratings.
MarketDash Edge Rankings
Cipher Digital has a weak momentum score of 0.65, according to MarketDash Edge.
The reading highlights persistent selling pressure despite Friday's gains.
Investors may look for stronger trading momentum and a recovery above key moving averages before treating the rebound as a lasting reversal.
ETF Exposure
Cipher Digital also has significant exposure through several exchange-traded funds.
The CoinShares Bitcoin Mining and Digital Power ETF (NASDAQ:WGMI) holds a 9.82% weighting in the stock.
The State Street Galaxy Hedged Digital Asset Ecosystem ETF (NASDAQ:HECO) has a 6.02% weighting, while the VanEck Onchain Economy ETF (NASDAQ:NODE) holds 3.59%.
As a result, ETF rebalancing and fund flows could influence trading activity in Cipher Digital shares.
CIFR Price Action
CIFR Price Action: Cipher Digital shares rose 10.81% to $6.15 in Friday's premarket trading, according to market data.
