TeraWulf (WULF) and Cipher Mining (CIFR) are set to benefit from a growing demand for artificial intelligence power as the companies see higher valuations from bitcoin to data center conversions, Morgan Stanley said in a Sunday note.

The firm said bitcoin miners with power assets and data center infrastructure can support both bitcoin mining and AI workloads.

Morgan Stanley said TeraWulf and Cipher Mining have bitcoin-to-data center growth potential as a significant driver for upside to their respective stocks.

Analysts also noted Marathon Digital (MARA) focuses on a different strategy of maximizing exposure to bitcoin price upside using a hybrid approach.

The note said power costs and execution remain key variables across the group as companies continue to invest in infrastructure while managing leverage and equity issuance.

Morgan Stanley initiated coverage of TeraWulf and Cipher Mining with overweight ratings and price targets of $37 and $38 respectively, and initiated Marathon Digital with an underweight rating and a $8 price target.

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