Investing in fundamentally strong penny stocks is a proven strategy to derive outsized gains and benefit from game-changing returns over time. According to recent filings, billionaire investor George Soros bought a penny stock that operates in the crypto mining segment. Soros gained exposure to Cipher Mining (CIFR), a company focused on developing and operating industrial-scale data centers for Bitcoin (BTCUSD) mining. Cipher aims to gain traction in Bitcoin mining, data center construction, and as a hosting partner to the world’s largest high-performance computing companies. 

According to a recent 13F filing, Soros Fund management opened a new position in Cipher Mining. The fund purchased 775,956 shares as of the end of the first quarter. 

Is This Bitcoin Stock a Good Buy Right Now?

Cipher Mining is strategically positioned in the competitive Bitcoin mining landscape with a distinctive approach to power management that sets it apart from peers. CEO Tyler Page explained that its industry-leading power costs, at just $0.027 per kilowatt hour, provide it with a competitive advantage. 

Cipher’s expertise lies in developing greenfield sites with favorable power contracts, managing a total operating and pipeline capacity of approximately 2.8 gigawatts. Page highlighted Cipher’s unique advantage in the Texas power market, where it strategically curtails operations during high-price periods (approximately 5% of the time) while capitalizing on near-zero electricity costs during the remaining 95%.

Beyond Bitcoin mining, Cipher is expanding into the high-performance computing (HPC) space, leveraging its power infrastructure to attract hyperscalers. This diversification has yielded results, including a $50 million investment from SoftBank (SFTBY) and a financial partnership with Fortress Investment Group to support data center development.

While maintaining a conservative outlook on Bitcoin price projections, Page expressed confidence in the cryptocurrency’s long-term adoption trajectory. 

How Did This Penny Stock Perform in Q1?

Cipher Mining delivered a solid Q1, mining 602 Bitcoin and reaching revenue of $49 million, a 16% increase from Q4 2024. During the earnings call, Page announced notable progress on the 300-megawatt Black Pearl data center in Texas, with Phase I nearing completion and expected energization in Q2. Cipher is redeploying legacy rigs to Black Pearl and accelerating hash rate growth to 16 exahash by the end of Q2 and 23.1 exahash by Q3 without additional capital expenditure.

The Bitcoin miner also signed a term sheet with Fortress Investment Group to finance the Barber Lake site. This deal should enable the development of next-generation HPC data centers. The partnership allows Cipher to capture 40% of the economics without contributing additional capital, and strengthening its position with potential hyperscale tenants.

Meanwhile, Cipher's treasury management strategy continues to outperform. In Q1, it generated $90 million in liquidity through innovative financing structures and strategic Bitcoin sales. Cipher’s disciplined approach has allowed the company to fund expansion without shareholder dilution while maintaining a strong balance sheet with $75 million in total liquidity as of March 31.

What Is the Target Price for the Penny Stock?

Analysts tracking Cipher expect revenue to rise from $151.3 million in 2024 to $453 million in 2026. Comparatively, adjusted earnings are forecast to expand from $0.33 to $0.61 over the next two years. So, priced at just 6x forward earnings, Cipher is a penny stock that trades at a reasonable valuation in 2025. 

Of the 11 analysts covering Cipher stock, eight recommend “Strong Buy,” two recommend “Moderate Buy,” and one recommends “Hold.” The average target price for Cipher stock is $7, indicating that analysts think the stock can double from here.