Bitcoin may be in the dumps, but two stocks linked to the flagship cryptocurrency could soon see their shares more than double, according to Morgan Stanley. In a Sunday note to clients, the investment firm initiated coverage of bitcoin miners Cipher Mining and TeraWulf , giving the stocks “overweight” ratings. Its analysts put a $38 price target on Cipher, implying 158% upside, while they set a $37 target for TeraWulf, suggesting 159% upside. “For both companies, this Bitcoin-to-[data center] growth potential is a significant driver of upside in their respective stocks,” Morgan Stanley analysts led by Stephen Byrd wrote. A systematic shortage of AI compute-related supply is driving demand for so-called “time to power” solutions, or technologies that minimize deployment and maximize uptime, the analysts said. And, hyperscalers’ recent capital expenditure updates suggest that appetite and budgets for compute and power are also on the rise, they added. As a result, hyperscalers are likely to pay higher premiums to use time-to-power solutions powered by former bitcoin miners that have transformed their mining operations into data centers, analysts noted. Existing American and European data center developers are already facing significant power access bottlenecks, according to their note. “Even if DC developers secured all large US and European Bitcoin company power access, they would still, in our view, be short [of] access to power,” the analysts said. Bitcoin gets battered Cipher and TeraWulf are repurposing their bitcoin mining operations to serve AI players during a downturn in the cryptocurrency market. Bitcoin was last trading at $70,385.89, down more than 40% from its record high of just over $126,000 hit last October. It rebounded after sinking to a nearly 16-month low of about $60,000 late last week. In the past week, Cipher shares have gained about 6%, while TeraWulf has added 21%. Over that same period, bitcoin has dropped roughly 10%. These plays aren’t failproof, according to Morgan Stanley. Credit challenges could stymie efforts to increase the capacity of data centers enough to accommodate AI clients, while large-language models could hit scaling walls, analysts noted. In addition, the process of converting bitcoin mining warehouses into data centers could introduce cost overruns, they said.