Morgan Stanley Backs Cipher, TeraWulf as Infrastructure Plays; Sees Limited Upside for MARA
Morgan Stanley launched coverage of three U.S.-listed bitcoin miners on Monday, drawing a clear distinction between companies repositioning as data center infrastructure providers and those maintaining strong exposure to bitcoin price movements.
Analyst Stephen Byrd initiated Cipher Mining (CIFR) and TeraWulf (WULF) at Overweight, assigning price targets of $38 and $37, respectively. Both stocks rallied on the news, with Cipher climbing 12.4% to $16.51 and TeraWulf gaining 12.8% to $16.12.
Marathon Digital (MARA) was started at Underweight with an $8 target. Shares were slightly higher on the session at $8.28.
At the heart of Morgan Stanley’s thesis is the view that certain mining facilities should be treated as infrastructure assets rather than pure cryptocurrency bets. Once a company builds a data center and secures a long-term lease with a creditworthy tenant, Byrd argues, the investment case shifts toward predictable, contracted cash flow — a profile more aligned with infrastructure investors than with bitcoin traders.
He compared these assets to data center REITs such as Equinix (EQIX) and Digital Realty (DLR), which trade at over 20x forward EBITDA due to their scale and steady growth. While he does not expect bitcoin-developed facilities to command similar multiples, he believes their valuations could expand as revenue becomes more stable and lease-driven.
Cipher Mining stands out in that framework. Byrd described its portfolio as fitting a potential “REIT endgame,” where converted, contracted data centers are ultimately valued like infrastructure assets. In this scenario, transitioning from self-mining to leasing capacity to hyperscale or enterprise customers would create predictable, utility-like cash flows, reducing reliance on bitcoin price swings.
TeraWulf earned a similar endorsement. Morgan Stanley cited the company’s record of signing data center agreements and management’s expertise in power infrastructure. Byrd estimates uncontracted sites could be converted at a present value of roughly $8 per watt. His base case assumes TeraWulf achieves about half of its planned 250 megawatts of annual data center growth between 2028 and 2032, with additional upside if execution improves.
The tone was more cautious on Marathon. Byrd argued that MARA’s hybrid strategy — balancing mining with data center ambitions — limits its potential upside from site conversions. The company’s continued emphasis on bitcoin accumulation, including issuing convertible debt to purchase BTC, keeps its valuation closely tied to mining economics.
Morgan Stanley also flagged concerns about the structural profitability of bitcoin mining, noting that historical returns on invested capital across the industry have been weak. In MARA’s case, mining fundamentals remain the dominant driver of shareholder returns.
The report underscores a broader shift in the sector as investors evaluate whether miners can successfully evolve into power and computing infrastructure landlords. Morgan Stanley’s view is selective: companies able to secure long-term contracts and generate steady data center cash flows may justify higher valuations, while those remaining heavily exposed to bitcoin price volatility face a more constrained outlook.
