Morgan Stanley sees AI data center pivot unlocking upside for bitcoin miners

Morgan Stanley initiated coverage on bitcoin miners transitioning into AI data center infrastructure, arguing that access to power is now the key bottleneck for AI expansion. The bank says miners with existing grid-connected sites and powered shells are well positioned to capture leases from hyperscalers needing faster electricity access. It highlighted Hut 8 as the top pick with an Overweight rating and a $263 target, implying about 141% upside, and Riot Platforms with an Overweight rating and a $36 target due to its large pipeline of powered sites. Applied Digital was rated Equal-weight with a $36.50 target, with upside limited by lower returns and financing risk. The note is supportive for the sector overall, as it suggests that AI demand could unlock new revenue streams and higher asset values for bitcoin miners beyond crypto mining.