Morgan Stanley initiated protection of three publicly traded bitcoin miners on Monday, assigning Obese scores to Cipher Mining (CIFR) and TeraWulf (WULF) whereas giving Marathon Digital (MARA) an Underweight score.
The transfer displays the financial institution’s view that sure miners are higher valued as infrastructure performs slightly than pure crypto or bitcoin bets.
Analyst Stephen Byrd and his workforce set worth targets of $38 for Cipher and $37 for TeraWulf. Shares of CIFR rose roughly 134% to $16.50 on Monday, whereas WULF climbed 13% to $16.20.
Marathon shares elevated barely to $8.28, under its $8 goal.
Morgan Stanley’s thesis focuses on the transformation of bitcoin mining websites into information heart property.
Byrd argued that after a miner has constructed a knowledge heart and signed a long-term lease with a creditworthy counterparty, the asset needs to be valued for steady, long-term money circulate slightly than bitcoin publicity.
He likened these websites to information heart actual property funding trusts (REITs) resembling Equinix (EQIX) and Digital Realty (DLR), which commerce at excessive multiples attributable to scale and predictable income.
Cipher Mining sits on the heart of that framework. Byrd described its services as suited to what he referred to as a “REIT endgame,” the place leased information facilities perform like toll roads, producing predictable money flows with minimal reliance on bitcoin’s worth.
TeraWulf additionally suits the mannequin, with a observe report of signing information heart agreements and administration expertise in energy infrastructure. The agency plans to broaden 250 megawatts of knowledge heart capability per 12 months by 2032, with Morgan Stanley modeling success charges of fifty% in a base case and 75% in an optimistic state of affairs.
Marathon Digital acquired a extra cautious evaluation. Byrd famous the corporate’s hybrid method, combining bitcoin mining with information heart ambitions, limits upside potential from bitcoin-to-data heart conversions.
Marathon’s deal with buying bitcoin and issuing convertible notes to fund mining positions makes its worth largely depending on bitcoin costs.
Morgan Stanley highlighted the corporate’s restricted historical past of internet hosting information facilities and the traditionally low return on invested capital in bitcoin mining as components within the Underweight score.
Bitcoin mining or AI?
The protection comes amid ongoing debate over whether or not bitcoin miners ought to evolve into energy and AI. Morgan Stanley’s stance is selective: miners with long-term leased information facilities could provide greater, extra predictable returns, whereas these targeted on mining stay uncovered to cryptocurrency volatility.
Bitcoin miners are reallocating cash and operational focus away from proof‑of‑work hashpower towards synthetic intelligence and excessive‑efficiency computing information facilities, as shrinking mining margins and halving‑pushed income pressures make conventional operations much less profitable.
Main publicly traded miners resembling Bitfarms (now rebranded as Keel Infrastructure) and IREN have signaled full or partial exits from legacy mining to host AI workloads and safe lengthy‑time period contracts with cloud and hyperscaler companions.