Funding financial institution KBW upgraded TeraWulf (WULF) to “outperform” from “market carry out” whereas elevating its value goal to $24 from $9.50.
The financial institution stated the market is underestimating the earnings upside from the corporate’s shift away from bitcoin mining towards AI and high-performance computing (HPC) leasing.
“We predict buyers underappreciate the magnitude of the BTC mining to HPC leasing combine shift in 2026-2027 and strong development catalysts on 646 MW web of seen HPC leasing pipeline by 2027,” wrote analyst Stephen Glagola within the Wednesday report.
The shares had been modestly greater in early buying and selling Wednesday, at $11.18.
Bitcoin miners have more and more pivoted to internet hosting AI and high-performance computing {hardware} of their present information facilities to spice up profitability.
The analyst estimated that TeraWulf’s present leases might drive a 505% EBITDA compound annual development fee (CAGR) from 2025 to 2027 and help a number of growth from the inventory’s present 13.8x EV/EBITDA valuation.
His bullish view facilities on the agency’s 646 megawatt HPC leasing pipeline by 2027 and the fast erosion of mining’s significance to the enterprise.
The financial institution expects HPC leasing to generate roughly two-thirds or extra of TeraWulf’s income in 2026 and the overwhelming majority of contribution revenue, with mining changing into largely immaterial by 2027.
The report stated execution threat is decrease than buyers assume, citing secured financing for main build-outs, a observe document of supply and supportive debt markets. Current share value weak point displays sector-wide promoting in bitcoin miners somewhat than company-specific fundamentals.
KBW stated these reductions ought to slender as lease revenues scale in 2026, driving cap-rate compression and valuation upside, with additional optionality from new HPC deal bulletins over the following yr.
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