Morgan Stanley has launched coverage on three publicly traded bitcoin miners and drew a sharp line between them. The firm rated Cipher Mining (CIFR) and TeraWulf (WULF) Overweight, with price targets of $38 and $37, while assigning Marathon Digital (MARA) an Underweight rating and an $8 target.
The market reacted quickly on Monday. CIFR rose 12.4% to $16.51, WULF gained 12.8% to $16.12, and MARA was modestly higher at $8.28. Analyst Stephen Byrd and his team based the call on a valuation split: some mining assets, in their view, should be seen less as direct bitcoin trades and more as data center infrastructure with contracted revenue.
Data center leases sit at the heart of the thesis
Byrd argued that once a bitcoin mining company has built a data center and signed a long-term lease with a creditworthy counterparty, that asset fits better within an infrastructure framework than a pure crypto framework. In that setup, valuation depends less on bitcoin price swings and more on long-duration, stable cash flow. It is a simple distinction, but it changes the investor base a company may appeal to.
He wrote that, at a macro level, a built-out data center backed by a long-term agreement should naturally sit with infrastructure investors rather than investors focused mainly on bitcoin volatility. Morgan Stanley’s view is that the market is not fully recognizing that difference in current pricing.
Cipher stands out in the “REIT endgame” approach
Cipher is the clearest example of that argument. Byrd described the company’s data centers as fitting what he called a “REIT endgame”. In his framework, contracted data center assets developed by bitcoin companies should ultimately be owned by REIT-like investors that value long-term, lower-risk contracted cash flow in a more conventional way.
To support the comparison, Byrd pointed to data center real estate investment trusts including Equinix (EQIX) and Digital Realty (DLR). He called them the closest comparable companies for valuing data center assets built by bitcoin firms. According to the report, those stocks trade at more than 20x forward EBITDA, meaning investors pay over $20 for each $1 of expected annual operating cash flow because of their scale, diversification and steadier growth profile.
Why MARA received a negative rating
Byrd did not argue that bitcoin-company data centers should immediately command the same multiples as large data center REITs. He said those REITs have growth characteristics that a single data center asset does not. Even so, he still sees room for higher valuations than the market currently assigns to some of these assets.
That gap also explains Morgan Stanley’s more cautious view on MARA. Compared with miners that can be framed around leased data center capacity and contracted cash flow, MARA is positioned more as a bitcoin exposure vehicle in this coverage. The report points to a widening divide inside the sector: some miners are being judged as infrastructure assets, while others remain tied much more closely to the price of bitcoin.