UBS launched coverage of five AI data center operators with Buy ratings across the board, arguing that new lease signings and stronger tenants can keep driving value higher, according to CNBC.
The list includes Core Scientific Inc. (NASDAQ:CORZ), Cipher Mining Inc. (NASDAQ:CIFR), Applied Digital Corp. (NASDAQ:APLD), TeraWulf Inc. (NASDAQ:WULF) and Hut 8 Corp. (NASDAQ:HUT).
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Pricing The Megawatt
UBS’s core thesis rests on a simple metric. Recent deals at TeraWulf created roughly $12 million of equity value per megawatt, the firm estimates. At Hut 8, it pegs the figure at $12 million to $14 million of net asset value per megawatt.
Every new lease across an undeveloped pipeline could add to those totals. UBS sees that as the group’s main upside lever.
TeraWulf Leads On Upside
TeraWulf drew a $24 price target, about 40% above its recent price. UBS highlighted 840 megawatts of signed AI and high-performance computing leases with Core42, Fluidstack/Google and Anthropic.
The Anthropic piece is a 20-year lease at a roughly 400-megawatt campus in Hawesville, Kentucky, expected to generate about $19 billion in revenue, CNBC reported in July. First power delivery is slated for the second half of 2027.
Hut 8 and Applied Digital
UBS set a $143 target on Hut 8, implying roughly 35% upside. Upcoming catalysts include energization at Beacon Point, initial capacity deliveries and more lease announcements.
Hut 8 signed a 15-year, $9.8 billion lease covering 352 megawatts at the Texas campus in May. CEO Asher Genoot told Reuters the deal carries “a 15-year obligation from a high-investment-grade counterparty.”
Applied Digital got a $38 target, about 33% above current levels. UBS expects its tenant base to shift from entirely high-yield today to majority investment-grade by early 2028. A possible REIT conversion adds optionality. Refinancing and additional leases are also on the catalyst list.
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Core Scientific’s AMD Path
UBS set a $24 target on Core Scientific, roughly 26% above its current price. The firm said capacity backed by Advanced Micro Devices Inc. (NASDAQ:AMD) should diversify the tenant base and improve the company’s risk profile.
AMD agreed in July to secure up to 2.5 gigawatts of Core Scientific capacity, starting with more than 500 megawatts in 2027.
UBS counts about 1.9 gigawatts of AMD expansion options, giving Core Scientific a path to a roughly 3-gigawatt platform. Financing clarity and naming the end customers for AMD capacity are the next catalysts.
Cipher’s Leasing Runway
Cipher received a $23 target, the smallest implied upside of the group at about 18%. The company has signed 493 megawatts of IT leases with Fluidstack/Google and Amazon.com Inc. (NASDAQ:AMZN). UBS estimates near-term leasing opportunities could add about $12 per share in value.
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