Morgan Stanley flags upside for Galaxy Digital and Cipher Digital in ERCOT Batch Zero grid interconnection process

Morgan Stanley is looking at Texas power grid capacity in an unusual way, focusing on ERCOT’s “Batch Zero” interconnection process for large new electric loads and the potential for digital-asset miners with power-hungry data centers to gain early momentum. A report cited by Yahoo Finance highlights the bank’s expectation that firms such as Galaxy Digital and Cipher Digital could be positioned for outsized upside if ERCOT’s large-load classification produces more favorable outcomes than the market currently assumes.

ERCOT’s interconnection process is designed to determine how new electricity users can connect to the grid and when. In the specific case discussed in the cited material, the emphasis is on “large-load” requests, which ERCOT can treat differently depending on size and timing. Morgan Stanley’s research flagged that the value of the process is not just in whether capacity is available, but in how the grid operator groups and processes the queue.

According to the cited description, Morgan Stanley estimated that ERCOT will classify roughly 65 gigawatts of large-load requests as part of its Batch Zero workflow. That figure, if accurate, implies a large pipeline of new demand that could become material for developers, power buyers, and counterparties tied to the projects seeking connection rights and schedules. The bank’s framework, as presented in the Yahoo Finance summary, appears to connect that pipeline size to expected opportunities for companies it names as candidates.

Within that broader demand picture, Morgan Stanley’s note singled out Galaxy Digital and Cipher Digital for potential “upside.” The idea is that these companies, which have been associated with operating or enabling crypto mining activity that depends heavily on electricity, could benefit from how Batch Zero large-load requests progress. However, the cited material does not provide detailed disclosure on the exact mechanism by which the bank links miners to specific ERCOT outcomes beyond the general premise of classification and process participation.

The companies themselves are not described in the cited summary as making new ERCOT filings or announcing new contracts in response to Batch Zero. Instead, the report appears to be a valuation and probability view built on ERCOT process assumptions. That matters because market narratives around ERCOT often move as interconnection milestones shift, but those milestones are determined by ERCOT decisions, not by market commentary.

Sector context adds to the relevance. ERCOT is the operator of the Texas power grid and the gateway for most new large electric loads. When ERCOT’s queues include substantial demand, it can reshape expectations for timelines, capacity planning, and power procurement strategies for users that require steady, scalable electricity. For digital-asset miners, the linkage between grid access and economics is direct, since mining operations typically rise and fall with power availability and cost.

Still, the level of specificity in the cited description is limited. The Yahoo Finance summary does not lay out the assumptions behind Morgan Stanley’s 65-gigawatt estimate, does not name the specific large-load request(s) involved, and does not quantify how much of that pipeline the bank believes Galaxy Digital or Cipher Digital could capture. It also does not discuss whether any projects have faced constraints, deferrals, or reclassification risks during earlier stages of the interconnection workflow.

What to watch next is how ERCOT’s Batch Zero process develops from classification into further queue milestones, because those steps can affect the practical ability to secure power and proceed with installations. For Galaxy Digital and Cipher Digital, the key market question will be whether progress in the interconnection pipeline translates into measurable contract or operational outcomes, rather than only research commentary.