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 quite than pure crypto or bitcoin bets.
Analyst Stephen Byrd and his group set value 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, beneath its $8 goal.
Morgan Stanley’s thesis focuses on the transformation of bitcoin mining websites into information middle belongings.
Byrd argued that after a miner has constructed an information middle and signed a long-term lease with a creditworthy counterparty, the asset ought to be valued for secure, long-term money stream quite than bitcoin publicity.
He likened these websites to information middle actual property funding trusts (REITs) comparable to Equinix (EQIX) and Digital Realty (DLR), which commerce at excessive multiples as a result of scale and predictable income.
Cipher Mining sits on the middle of that framework. Byrd described its amenities as suited to what he known as a “REIT endgame,” the place leased information facilities operate like toll roads, producing predictable money flows with minimal reliance on bitcoin’s value.
TeraWulf additionally suits the mannequin, with a observe file of signing information middle agreements and administration expertise in energy infrastructure. The agency plans to increase 250 megawatts of information middle capability per yr by 2032, with Morgan Stanley modeling success charges of fifty% in a base case and 75% in an optimistic situation.
Marathon Digital acquired a extra cautious evaluation. Byrd famous the corporate’s hybrid method, combining bitcoin mining with information middle ambitions, limits upside potential from bitcoin-to-data middle 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 supply 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 comparable to 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.
