Key Highlights

  • The spark was a new Buy rating from Jones Trading analyst Kevin Dede, with a $4 price target.
  • TeraWulf fell to $15.11, even though Jones Trading reinstated coverage with a Buy rating and a $30 target.
  • The S&P 500 dropped 59.72 points to 7,683.69, and Bitcoin slipped to around $83,450 near the US stock market close.
  • Core Scientific fell to $16.66, with no company-specific news, moving with the data-center group on rates.

Cango (NYSE:CANG) soared on a bullish initiation tied to its AI pivot, while TeraWulf (NASDAQ:WULF) and Core Scientific (NASDAQ:CORZ) fell, showing how divided analysts and investors are on the miner-to-data-center trade.

From Mining coins to hosting AI

For years, bitcoin miners were simply bets on the price of bitcoin. Now many are trying to become something else: providers of computing power and data-center capacity for artificial intelligence. The pitch from these companies is that miners already have what AI companies crave, including large power connections, sites and experience running energy-hungry machines.

On Monday, September 28, that pivot produced sharply different results across the group, showing how Wall Street is still deciding who wins and who loses.

Cango: the day's big winner

Cango, a small-cap miner listed on the NYSE, jumped to $2.27. The spark was a new Buy rating from Jones Trading analyst Kevin Dede, with a $4 price target. His thesis centers on the company's pivot to "artificial intelligence and high-performance computing infrastructure," including a Partnership with Bitmain and GPU services through its EcoHash Subsidiary in Georgia.

The move stood out on a day when most risk assets fell. The S&P 500 dropped 59.72 points to 7,683.69, and bitcoin slipped to around $83,450 near the US stock market close.

TeraWulf and Core Scientific: losers despite the theme

Other AI-pivot names did not share the enthusiasm. TeraWulf fell to $15.11, even though Jones Trading reinstated coverage with a Buy rating and a $30 target. It dropped along with data-center names on rising rates and oil, and market reports noted elevated Put Option activity. Core Scientific fell to $16.66, with no company-specific news, moving with the data-center group on rates.

Applied Digital: the split in one stock

No stock showed Wall Street's divide more clearly than Applied Digital (NASDAQ:APLD), a data-center developer. On the same day, two firms launched coverage with opposing views. Rothschild & Co Redburn's Alex Haissl started at Neutral with a $22 target, citing "execution, power, and pipeline-conversion risks." Jones Trading's Kevin Dede started at Buy with a $70 target. The stock slid to about $24.79.

The gap between a $22 target and a $70 target captures the debate: optimists see huge Demand for AI computing capacity, while skeptics worry about the challenges of building and filling data centers on time. Applied Digital reports Earnings on October 8.

Notably, Dede was behind two of the day's most bullish calls on the theme, at Cango and Applied Digital, while Jones Trading's Buy call on TeraWulf did not stop that stock from falling. That shows how analyst support alone has not been enough to decide the trade.

The AI hardware backdrop

The split played out against a volatile day for AI infrastructure. Reports that OpenAI paused Training of some frontier models hit chipmakers and data-center suppliers, with Vertiv (NYSE:VRT) and Modine Manufacturing (NYSE:MOD) among the decliners. Rising rates added pressure: the 10-year Treasury Yield hit its highest level since 2007, a headwind for capital-intensive companies that rely on financing to build new facilities.

Contracts and customer announcements will decide the split

Watch for contracts or customer announcements from miners pivoting to AI, since signed deals are what turn the thesis into revenue. Applied Digital's October 8 earnings will be an important test for the group.

Micron (NASDAQ:MU)'s results on Wednesday will offer a read on overall AI hardware demand, while Friday's September jobs report could move yields. Bitcoin's direction also still matters for miners that continue to mine, so the crypto price will remain part of the story.