Reviewed by Gotrade Internal Analyst
Gotrade News - Morgan Stanley officially kicked off coverage of the Bitcoin mining sector with a completely new valuation approach on Monday (Feb 10). The investment bank is looking past the "crypto pure play" label, viewing these companies as critical energy infrastructure assets needed to fuel the AI boom.
This move underscores a shift in Wall Street sentiment, which is starting to prize the stability of data center cash flows over Bitcoin's wild price swings. The pivot in focus immediately triggered a double-digit rally for related stocks as the market waits for the next big move.
Key Takeaways
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Morgan Stanley now values miners as data center infrastructure assets for AI, rather than just crypto mining operations.
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Cipher Mining and TeraWulf received Overweight ratings thanks to their successful transition to a hybrid business model.
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MARA Holdings was hit with an Underweight rating due to its full exposure to Bitcoin's price volatility.
Bitcoin is currently hovering around US$70,000, down roughly 40% from its all-time high last October. This drawdown is forcing institutional investors to hunt for value in mining companies beyond just their correlation to crypto assets.
According to Morgan Stanley, the massive computing power controlled by miners is now more valuable if redirected toward non-crypto needs. Analysts see massive upside for companies capable of leasing their power capacity to tech giants hungry for AI development.
Morgan Stanley analyst Stephen Byrd set ambitious price targets for Cipher Mining and TeraWulf at US$38 and US$37, respectively. The valuation hinges on a potential "REIT endgame," where mining facilities evolve into data center real estate generating steady, rent-like income.
The Valuation Gap
The market reacted immediately to this new thesis, sending Cipher Mining shares up 13.4% and TeraWulf up 13% on Monday (Feb 10). Investors are starting to price in the certainty of long-term cash flows over the unpredictable returns of mining rewards.
On the flip side, MARA Holdings was slapped with an Underweight rating and a measly US$8 price target. The company's strategy of doubling down on Bitcoin exposure through acquisitions is seen as risky business while mining profitability trends downward.
Byrd highlighted that a total reliance on crypto prices makes MARA Holdings valuation vulnerable as margins compress. Without diversifying into the data center game, the company misses out on the valuation premium the market is now handing to its competitors.
The Great Industry Pivot
Revenue per terahash for miners has plummeted to US$35, a far cry from the US$70 level seen when Bitcoin was at its peak. This crunch in profitability has become the main catalyst driving industry players to execute aggressive business pivots.
Some firms like Bitfarms have even announced plans to rebrand as Keel Infrastructure to reflect their new direction. Hut 8 Corp. is also reportedly converting a chunk of its mining ops into AI power centers in collaboration with Anthropic.
Morgan Stanley predicts that power demand from data centers will skyrocket by 74 gigawatts by 2028. This transition by Bitcoin miners is seen as a rapid fix to plug the looming power supply deficit facing the US tech sector.
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Reference:
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The Daily Upside, Morgan Stanley Begins Coverage Of Bitcoin Miners As Wider Infrastructure Plays. Accessed on February 11, 2026
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Coinmarketcap, Morgan Stanley Initiates Bitcoin Miner Coverage. Accessed on February 11, 2026
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