Buy These 2 Crypto Stocks Poised for 150% Upside As They Pivot to AI: MS

Two bitcoin-mining stocks have big upside potential, Morgan Stanley analysts say, but it’s not tied to a bullish outlook for cryptocurrency.

Rather, the companies are well-positioned to convert to data centers to help fuel the AI boom, the bank said in a February 8 client note.

TeraWulf and Cipher Mining have 159% and 158% upside, respectively, said Morgan Stanley in a note initiating coverage of the stocks. Both have seen huge surges in their share price over the last 12 months, with TeraWulf rising 245% and Cipher up 183%.

The bank listed several reasons for their “unusually high” price targets, including:

• AI’s capabilities will continue to improve exponentially
• There is still plenty of value creation on the table for both AI enablers and adopters
• Demand for AI computing power will be higher than supply
• The supply and demand imbalance should alleviate power bottlenecks
• Current bottlenecks mean that bitcoin miners-turned-AI data centers are the “most attractive” option for data center developers right now

TeraWulf, in particular, “has a significant history of building power infrastructure, and has a track record of multiple repeat Bitcoin-toDC conversion transactions with customers,” a team of analysts led by Stephen C. Byrd said. “In our view, the company has a viable path to significant annual growth in power and data center capacity, and we include this growth potential in both our base and bull cases.”

Meanwhile, Cipher Mining “has entered multiple agreements with data center customers, and has assembled a team with significant data center construction experience,” the analysts said. As of Q2 2025, the firm had no AI power hosting contracts — now, it has 10 and 15 year deals with Google and Amazon, respectively.

From June to December 2025, the equity value creation per watt for companies like TeraWulf and Cipher Mining rose from about $7 to $18, signalling strong demand for power.

Despite Morgan Stanley’s big upside targets, the bank said there are risks to its outlook. One is that the firms aren’t able to execute properly on their conversion to data centers.

“These data center projects are very large relative to the overall size of the Bitcoin companies, and execution risks could result in project delays and cost overruns,” the analysts said. “This, in turn, could result in greater volumes of equity capital to fund these data center projects, which can cause unexpected dilution and financing challenges.”

Another is that hyperscalers could start to pull back on AI spending. Investors have grown nervous about AI capex in recent months, as they continue to look for clues about how the hundreds of billions of dollars in annual investments will pay off.

“We view a slowdown in AI spend as the largest single risk, though the updates from hyperscalers this past week suggest the risk to AI infrastructure capex is to the upside, not to the downside,” the note said. “Though the AI infrastructure industry remains under-supplied with power, it is possible that key AI players could moderate their data center capex for any number of reasons.”