MARA RIOT, GLXY Price Targets Cut At Morgan Stanley On AI Credit Concerns: Analyst Still Sees Over 100% Upside

• TeraWulf's revised $65 target implies approximately 371% upside, the largest among the six stocks.
• MARA Holdings stood apart with just 2.4% implied upside to Morgan Stanley's revised $10 target.
• Riot Platforms and Galaxy Digital retain more than 100% implied upside to their revised targets, despite cuts to $35.50 and $43, respectively.

Morgan Stanley lowered price targets on several Bitcoin miners pivoting to artificial intelligence infrastructure, citing changing valuations for pipeline sites as credit-market conditions for the AI trade evolve. 

Yet even after the cuts, the firm's revised targets imply more than 100% upside for three of the four stocks whose targets were lowered, based on their current share price.

The firm cut its price targets on MARA Holdings (MARA), Riot Platforms (RIOT), Galaxy Digital (GLXY) and Cipher Mining (CIFR), while raising its targets on Hut 8 (HUT) and TeraWulf (WULF). Morgan Stanley maintained its existing ratings on all six stocks.

Morgan Stanley Cuts Targets As AI Infrastructure Valuations Shift

Morgan Stanley lowered its target on Riot Platforms to $35.50 from $43, and maintained an ‘Overweight’ rating. Despite the cut, the revised target implies approximately 110% upside from Riot's current share price of around $16.

Galaxy Digital's target was reduced to $43 from $48. Morgan Stanley also kept its ‘Overweight’ rating on Galaxy. The new target still implies roughly 114% upside from its current share price of around $20.

Cipher Mining's target was trimmed to $51.50 from $54.The revised target implies approximately 283% upside from the stock's $13 share price at the time of writing, with Morgan Stanley retaining its ‘Overweight’ rating. 

MARA Holdings stands apart. Morgan Stanley lowered its target to $10 from $11 and maintained an ‘Underweight’ rating. Trading at around $10, MARA has only about 2% implied upside to the new target, making it the least attractive stock on this measure among the six companies.

MARA Stock Underperforms Peers

MARA stock also took the biggest hit after the price target revision, down 2.6% in midday trade on Friday. On Stocktwits, retail sentiment around the shares trended in ‘bearish’ territory over the past day. 

RIOT stock saw retail sentiment trending in the ‘bearish’ zone, while the shares traded flat in midday trade. CIFR stock fell around 1.4%, with sentiment shifting to ‘bearish’ from ‘neutral’ territory over the past day. 

GLXY stock bucked the broader trend, edging 0.8% higher in midday trade. On Stocktwits, retail sentiment around the firm remained in the ‘neutral’ zone.

Hut 8, TeraWulf Get Target Hikes

Morgan Stanley marginally raised its price target on Hut 8 to $275 from $273, an increase of less than 1%, while maintaining an ‘Overweight’ rating. The revised target implies approximately 237% upside from the stock's $81 share price.

TeraWulf received a larger increase, with its target raised to $65 from $62.50, a 4% hike. The new target implies roughly 371% upside from its current share price of over $13, the largest implied gain among the six stocks.

HUT stock gained as much as 1.5% in midday trade. On Stocktwits, retail sentiment around the firm trended in ‘bearish’ territory over the past day. WULF stock traded flat but saw sentiment trending in the ‘bullish’ zone.

Wall Street Questions AI Spend

Morgan Stanley’s revisions come after tech stocks led Wall Street lower on Thursday after a report that OpenAI’s annualized revenue was $20 billion below what the company had signaled. The report raised doubts about whether AI revenue can support the spending. 

The 10-year Treasury yield stood at 5.226%, not far from the 24-year high it hit Wednesday. For miners that fund data center conversions with debt, higher rates mean higher financing costs and lower valuations for sites that don’t yet have signed leases. 

Read also: COIN, HOOD Stocks Get Price Target Hikes, While Morgan Stanley Cuts Gemini To ‘Underweight’

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