Powered Shell Providers Come to Play: Initiating Coverage on RIOT, HUT, and APLD: Bitcoin Mining/Data Center Development | North America

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Powered Shell Providers Come to Play: Initiating Coverage on RIOT, HUT, and APLD: Bitcoin Mining/Data Center Development | North America

Foundation

July 23, 2026 04:01 AM GMT

Morgan Stanley & Co. LLCMBitcoin Mining/Data Center Development | North Stephen C Byrd

America Equity Analyst

Stephen.Byrd@morganstanley.com +1 212 761-3865

Bitcoin Mining/Data Center DevelopmentPowered Shell Providers Come North America

to Play: Initiating Coverage on Industry View Attractive

RIOT, HUT, and APLD

We launch coverage on 3 additional BTC-turned-High

Performance Computing companies—stocks we now refer to as

Powered Shell Providers (PSP)—all of which serve the massive

demand for AI power. Initiate OW on HUT ($263, 141% upside)

and RIOT ($36.00, 68% upside). Initiate EW APLD ($36.50, 21%

upside).

Key Takeaways

Despite the recent market pullback among PSPs (formerly Bitcoin miners) we

remain bullish—reflected in 5 Overweights, 1 Equal-weight and 1 Underweight.

Recent deals with hyperscalers show highly attractive terms. Further, PSP stocks

trade at a EV/watt far below these deals' value creation.

Among our 3 initiations, HUT stands out with the greatest upside to our PT

(141%), with downside limited by the value of existing contracts (-4% bear case).

We address broader concerns we hear with respect to AI infrastructure capex,

but we remain bullish on the "Intelligence Superhighway."

We think now is the time to buy these stocks—we believe the market correction

is at odds with the lucrative transactions into which these companies sign.

Exhibit 1: Valuation and Key Financial Metrics

Hut 8 Riot Platforms Applied Digital

(HUT) (RIOT) (APLD)

Rating Overweight Overweight Equal-Weight

Stock Price at 7/21 Market Close $ 108.98 $ 21.49 $ 30.05

Equity Market Cap ($m) $ 11,360 $ 7,530 $ 7,960