Morgan Stanley initiated coverage of three publicly traded bitcoin miners on Monday, assigning Overweight ratings to Cipher Mining (CIFR) and TeraWulf (WULF) while giving Marathon Digital (MARA) an Underweight rating.

The move reflects the bank’s view that certain miners are better valued as infrastructure plays rather than pure crypto or bitcoin bets.

Analyst Stephen Byrd and his team set price targets of $38 for Cipher and $37 for TeraWulf. Shares of CIFR rose roughly 134% to $16.50 on Monday, while WULF climbed 13% to $16.20. 

Marathon shares increased slightly to $8.28, below its $8 target.

Morgan Stanley’s thesis focuses on the transformation of bitcoin mining sites into data center assets. 

Byrd argued that once a miner has built a data center and signed a long-term lease with a creditworthy counterparty, the asset should be valued for stable, long-term cash flow rather than bitcoin exposure. 

He likened these sites to data center real estate investment trusts (REITs) such as Equinix (EQIX) and Digital Realty (DLR), which trade at high multiples due to scale and predictable revenue.

Cipher Mining sits at the center of that framework. Byrd described its facilities as suited to what he called a “REIT endgame,” where leased data centers function like toll roads, generating predictable cash flows with minimal reliance on bitcoin’s price. 

TeraWulf also fits the model, with a track record of signing data center agreements and management experience in power infrastructure. The firm plans to expand 250 megawatts of data center capacity per year through 2032, with Morgan Stanley modeling success rates of 50% in a base case and 75% in an optimistic scenario.

Marathon Digital received a more cautious assessment. Byrd noted the company’s hybrid approach, combining bitcoin mining with data center ambitions, limits upside potential from bitcoin-to-data center conversions. 

Marathon’s focus on acquiring bitcoin and issuing convertible notes to fund mining positions makes its value largely dependent on bitcoin prices. 

Morgan Stanley highlighted the company’s limited history of hosting data centers and the historically low return on invested capital in bitcoin mining as factors in the Underweight rating.

Bitcoin mining or AI?

The coverage comes amid ongoing debate over whether bitcoin miners should evolve into power and AI. Morgan Stanley’s stance is selective: miners with long-term leased data centers may offer higher, more predictable returns, while those focused on mining remain exposed to cryptocurrency volatility.

Bitcoin miners are reallocating money and operational focus away from proof‑of‑work hashpower toward artificial intelligence and high‑performance computing data centers, as shrinking mining margins and halving‑driven revenue pressures make traditional operations less lucrative. 

Major publicly traded miners such as Bitfarms (now rebranded as Keel Infrastructure) and IREN have signaled full or partial exits from legacy mining to host AI workloads and secure long‑term contracts with cloud and hyperscaler partners.