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Cantor AI Infrastructure: 'We continue to view the selloff as a significant overreaction' - $Cipher Digital(CIFR.US) $Riot Platforms(RIOT.US) $Hut 8 Mining(HUT.US) $Core Scientific, Inc.(CORZ.US) $Keel Infrastructure(KEEL.US) $IREN(IREN.US) $Terawulf(WULF.US) $Nebius(NBIS.US) $Coreweave(CRWV.US)

Another bloody week for AI infrastructure, with Thursday the worst day and a slight recovery on Friday. Our coverage finished down an average of 9.7% w/w, compared with declines of 5.0% for QQQ and 12.1% for SOX.

Three overlapping concerns drove the selloff: the availability and cost of AI funding, the viability of neoclouds given their reliance on hyperscalers and AI labs, and access to power, heightened by emphatic midterm results. The midterms delivered a blue wave, and in Texas, Gina Hinojosa defeated Greg Abbott to become the first Democratic governor since 1990. She has called for a pause on data center permits and approvals until the legislature passes community protections.

In our view, the contracted and energized base is unaffected, and the impact is a slower, more selective pipeline that favors operators with signed interconnection agreements and investment-grade tenants in place. The funding fear showed up elsewhere as well. Bloomberg reported that MSFT (OW, Blakey) is tightening oversight of some neocloud projects, and Apollo (APO, NC) said on its 3Q call that it will take a more defensive approach to AI investments with a focus on secured and senior debt. Management at Apollo also described a plan to position defensively and prepare to play offense, which implies capital remains available at the right price.

We also heard from CIFR, RIOT, HUT, CORZ, KEEL, IREN, and WULF. RIOT announced a 15 year, $28bn TCV lease for 910 MW at Corsicana, while IREN beat on the numbers but pushed its target of $4bn+ of contracted ARR operational from YE26 to as late as February. We continue to view the selloff as a significant overreaction, especially for operators with signed leases and permits in hand, as the contracted and energized base is unaffected by the midterms and demand for compute continues to exceed supply.

Bitcoin miners are ripping today, with 9 big names up between 10% and 17%

$Hut 8 Mining(HUT.US) +16.7%

$Cipher Digital(CIFR.US) +16.7%

$Riot Platforms(RIOT.US) +16.3%

$Terawulf(WULF.US) +14.2%

$CleanSpark(CLSK.US) +13.5%

$Galaxy Digital(GLXY.US) +13.1%

$Core Scientific, Inc.(CORZ.US) +10.8%

$IREN(IREN.US) +10.6%

$Mara(MARA.US) +10.3%

Bitcoin itself is only up about 1%, and the S&P 500 is up 0.6%

The bounce comes after a brutal month. $Cipher Digital(CIFR.US) fell 56% and $IREN(IREN.US) fell 47% in the 21 trading days into Monday's close, and most of the group lost 30% to 45%

Keefe Bruyette warned Monday of a "lease catalyst drought" for AI data center hosting deals, while JPMorgan called $Cipher Digital(CIFR.US) "substantially undervalued" this morning with an $18 target, as other analysts cut theirs

These stocks now trade as AI data center plays more than bitcoin bets, so a 15% day after a 40% drawdown says more about positioning than fundamentals, and the next hosting lease is what decides whether it sticks

Source: StockMarket.News

Short sellers betting against AI data center stocks just made $6 billion in October

That is paper profit in just 22 days, per ORTEX data reported by Reuters this morning

Bets against $Nebius(NBIS.US) made the most at $2.94 billion, even though Nebius shorts are still down $3.33 billion on the year

$Coreweave(CRWV.US) shorts made nearly $1.7 billion as the stock slid almost 30% this month

$IREN(IREN.US) and $Applied Digital(APLD.US) shorts made more than $1.2 billion combined, and $Core Scientific, Inc.(CORZ.US) shorts added $115 million

Short interest across all five now sits between 20% and 26% of free float, with about $17 billion of stock sold short, and borrowing is still cheap

The fear is simple. These companies borrowed heavily to build AI capacity, and with rate hike bets rising the math on that debt gets harder every week

But 20% to 26% of the float sold short is a crowded trade. If one of these names posts a strong contract or a clean refinancing, the squeeze could be just as violent as the drop

Source: StockMarket.News