Morgan Stanley Touts AI "Picks-and-Shovels" Power Trade, Sees 12 Stocks Up 40% or More

Morgan Stanley said the AI "picks-and-shovels" trade remains intact, naming 12 US stocks tied to data-center power bottlenecks that carry at least 40% upside to its price targets, in a Sept. 24 note to clients. The bank said compute demand may far outstrip supply for years, constrained by limited electricity, scarce construction labor and regulatory hurdles. It expects a "barbell" of relative strength over the next six to 12 months, with both AI adopters and infrastructure suppliers outperforming, rather than leadership shifting along a single path as in past computing cycles. Top implied gains include TeraWulf (WULF-US) at 260.6%, Cipher Mining (CIFR-US) at 182.9%, Hut 8 (HUT-US) at 156.1% and INNIO (INIO-US) at 140.9%. Others on the overweight list: Clearway Energy (CWEN-US), ERock (EROC-US), Riot Platforms (RIOT-US), Liberty Energy (LBRT-US), Williams (WMB-US), Cummins (CMI-US), GE Vernova (GEV-US) and NextEra Energy (NEE-US).