Morgan Stanley starts coverage on bitcoin miners, favoring Cipher Mining and TeraWulf and assigning MARA a sell rating.

Morgan Stanley Initiates Bitcoin Miner Coverage, Prefers CIFR and WULF Over MARA

Morgan Stanley began coverage of three publicly traded bitcoin miners on Monday, favoring companies positioned to transition into data center infrastructure while taking a more cautious stance on a miner closely tied to bitcoin price exposure.

Analyst Stephen Byrd rated Cipher Mining (CIFR) and TeraWulf (WULF) Overweight, assigning price targets of $38 and $37, respectively. Both stocks surged following the report, with Cipher rising 12.4% to $16.51 and TeraWulf climbing 12.8% to $16.12.

Marathon Digital (MARA) was initiated at Underweight with an $8 price target. Shares were modestly higher at $8.28.

Morgan Stanley’s differentiation hinges on how mining assets are valued. Byrd argues that once a miner develops a data center and secures long-term leases with creditworthy tenants, the asset profile shifts from a volatile crypto play to a contracted infrastructure investment. In that case, valuation should be based more on stable cash flow generation than on bitcoin price swings.

He pointed to data center REITs such as Equinix (EQIX) and Digital Realty (DLR) as relevant benchmarks. Those companies trade at more than 20 times forward EBITDA due to predictable earnings, scale and diversification. While Byrd does not expect bitcoin miner-developed facilities to reach comparable multiples, he believes the market may be undervaluing their contracted data center potential.

Cipher Mining exemplifies what Byrd described as a potential “REIT endgame.” If the company converts self-mining operations into leased data center capacity for hyperscale or enterprise clients, the resulting steady revenue streams could justify infrastructure-style valuations.

TeraWulf fits a similar model. Morgan Stanley highlighted its experience securing data center agreements and management’s background in power infrastructure development. Byrd estimates that uncontracted sites could be converted at a present value of roughly $8 per watt. His base case assumes the company achieves about half of its targeted 250 megawatts of annual data center growth from 2028 through 2032, with additional upside if execution exceeds expectations.

The outlook for Marathon Digital was more reserved. Byrd noted that the company’s hybrid approach — maintaining significant bitcoin mining operations while pursuing data center initiatives — limits its exposure to infrastructure-style rerating. MARA’s strategy of increasing bitcoin holdings, including through convertible debt issuance, further ties its performance to mining economics.

Morgan Stanley also warned that bitcoin mining profitability faces structural pressures, citing historically weak returns on invested capital across the sector. For Marathon, mining fundamentals remain the primary determinant of valuation.

The coverage reflects a broader industry debate over whether bitcoin miners can successfully reposition as power and computing infrastructure providers. Morgan Stanley’s view is selective: miners that secure long-term contracts and generate dependable data center revenue may warrant higher valuations, while those remaining primarily leveraged to bitcoin price movements could face more constrained upside.