UBS has initiated coverage on five stocks of AI data center hosting companies that transitioned from Bitcoin mining, issuing a rare unanimous Buy rating across all names and projecting an average upside of 36%.

The investment thesis is not anchored in traditional asset scale, but rather in the grid interconnection positions and highly competitive low-cost power resources these companies secured ahead of time during earlier Bitcoin mining cycles. These elements have now transformed into extremely scarce core assets amid the current wave of AI infrastructure buildout.

In an infrastructure report released on September 22, 2026, UBS noted that these five companies collectively hold 4.8GW of leased capacity, with an additional expansion pipeline of approximately 12GW. However, the market is currently only ascribing valuation recognition to contracted assets.

Time to power has become the core bottleneck constraining data center expansion. The U.S. grid interconnection queue has stretched beyond five years, and vacancy rates in the traditional data center market are below 2%.

UBS analyst Ryan Gravett emphasized that from 2028 to 2030, AI infrastructure is expected to add approximately 260GW of capacity, triple the roughly 90GW of additions anticipated from 2025 to 2027.

Based on this supply-demand imbalance, UBS's price targets for the five companies demonstrate significant upside potential: Hut 8 (HUT.US) carries a price target of $143, representing 45% upside from its September 18 closing price of $99; TeraWulf (WULF.US) has a target of $24, implying 41% upside from $17; Applied Digital (APLD.US) has a target of $38, offering 35% upside from $28; Core Scientific (CORZ.US) has a target of $24, reflecting 33% upside from $18; and Cipher Digital (CIFR.US) has a target of $23, indicating 25% upside from $18.

Data compiled by Woofun AI shows that these five companies currently trade at 12 to 18 times 2028 EBITDA, notably below the approximately 19 times valuation level of traditional data center REITs such as Digital Realty (DLR.US) and Equinix (EQIX.US). UBS believes this discount primarily reflects market concerns about execution risk, tenant concentration, and renewal uncertainty in non-traditional markets, rather than any lack of fundamentals.

Improvement in tenant structure is another key variable supporting valuation recovery. Over the past two years, as these companies transitioned from Bitcoin miners, early tenants were predominantly neocloud providers whose credit often depended on backing from hyperscalers such as Google (GOOGL.US). However, tenant credit quality has recently shown marked improvement.

Applied Digital (APLD.US) signed 810MW of leases between April and June 2026, with Meta (META.US) (AA- rated) as the tenant, while Oracle (ORCL.US) (BBB rated) contracted 200MW, reducing CoreWeave's (CRWV.US) (B+ rated) share from 100% to 30%. Cipher Digital (CIFR.US) signed a 286MW lease with Amazon (AMZN.US), with Amazon as a direct investor committing to bear cost overruns. Core Scientific (CORZ.US) signed a 530MW lease with AMD (AMD.US), which not only provides project financing support but also holds warrants. Hut 8 (HUT.US) signed a 704MW lease with Nvidia (NVDA.US), with Nvidia as an AA-rated tenant providing a very strong credit endorsement. TeraWulf (WULF.US) signed a 401MW lease with Anthropic for a term of 20 years.

UBS estimates indicate that for every 100 basis point increase in cost of capital, the EBITDA multiple compresses by approximately 2 turns. Therefore, bringing in higher-credit tenants can effectively lower financing costs and thereby support higher valuation multiples.

Power pipeline as a core option: its visibility and regional policy differences create layered value. The five companies collectively hold approximately 12GW of unleased power pipeline, of which about 6GW will enter the pre-leasing window with hyperscalers over the next 2 to 3 years.

UBS categorizes this pipeline into three tiers by visibility. The first tier comprises high-probability opportunities within the 2027 delivery window, including 340MW for Cipher Digital (CIFR.US), 400MW for TeraWulf (WULF.US), and 250MW for Applied Digital (APLD.US). The second tier consists of pipeline delivering in 2028 to 2029. The third tier comprises long-term options beyond 2030.

Cipher Digital's (CIFR.US) pipeline is concentrated in Texas, with approximately 95% of capacity located in the state. However, ERCOT's Batch Zero review process creates uncertainty around power allocation and commissioning timelines. Although its 477MW capacity falls within the 2027 delivery window and the Reveille site's 70MW has received an approved interconnection agreement, management still describes the demand environment as "never stronger."

By contrast, Applied Digital's (APLD.US) pipeline is spread across North Dakota, Louisiana, and Alabama, unaffected by ERCOT policy. The company has locked in 1.2GW of natural gas generation units through the Base Electron joint venture, with power supply available starting in 2029, and management disclosed that approximately 700MW of electromechanical equipment can be procured annually.

Hut 8's (HUT.US) pipeline includes expansion options at the River Bend campus, where the original lease includes an option for up to 1GW of incremental capacity. The company is also evaluating on-site power generation options, potentially in partnership with Entergy (ETR.US), while American Bitcoin's (ABTC.US) 567MW of power resources can also serve as a reserve for AI use.

Delivery execution progress is a key near-term catalyst. Currently, the five companies have delivered only about 720MW, representing 15% of contracted capacity. However, by mid-2027, an additional 1.6GW will be delivered, bringing total deliveries to 2.3GW, or 50% of contracted capacity.

Specifically, Applied Digital (APLD.US) has delivered 175MW, representing 44% of its commitment to CoreWeave (CRWV.US). Core Scientific (CORZ.US) has delivered 437MW, or 75% of its commitment to CoreWeave (CRWV.US). Cipher Digital's (CIFR.US) Black Pearl site was delivered two months ahead of schedule, and the Amazon (AMZN.US) lease has begun generating revenue. Satellite imagery of Hut 8's (HUT.US) River Bend campus shows foundation work underway, with the first 65MW expected to be delivered in the second quarter of 2027.

UBS's allocation recommendations focus on three directions. First, the scarcity of time to power supports rents and development yields, with Hut 8 (HUT.US) and TeraWulf (WULF.US) having the highest pipeline visibility. Second, tenant structure is improving from neocloud providers toward higher credit quality, with Applied Digital (APLD.US) and Cipher Digital (CIFR.US) showing the fastest tenant quality improvement. Third, delivery execution is a near-term catalyst, with Core Scientific (CORZ.US) and Applied Digital (APLD.US) leading on delivery progress.

This series of developments indicates that the thesis of miners transitioning to AI hosting has moved from proof of concept into a phase of substantive value realization.