UBS Pumps Five AI-Hosting Stocks as Bitcoin Miners Pivot
UBS Research Report Breakdown: Bitcoin Mining Companies Pivot to AI Hosting
The UBS Group has initiated coverage of five AI data center hosting stocks that have transitioned from Bitcoin mining operations, issuing a Buy rating across the board with an average upside potential of 36%. The five companies - Hut 8, TeraWulf, Applied Digital, Core Scientific, and Cipher Digital - have secured contracts for approximately 4.8GW in leased capacity over the past two years.
The grid interconnection locations and low-cost power secured early on by these companies have become scarce assets for AI infrastructure development. The UBS report notes that AI infrastructure will add approximately 260GW of capacity from 2028 to 2030, triple the approximately 90GW added from 2025 to 2027.
The five companies are currently trading at a discount compared to data center REITs, with valuations ranging between 12 and 18 times 2028E EBITDA. UBS attributes this discount to execution risk, tenant concentration, and renewal uncertainty in non-traditional markets.