KBW has sharply upgraded its stance on TeraWulf (WULF), saying the bitcoin miner’s pivot into AI and high-performance computing (HPC) leasing is being badly underestimated by the market.
In a Wednesday note, analyst Stephen Glagola lifted TeraWulf to “outperform” from “market perform” and raised the price target to $24 from $9.50. KBW argues the company’s move away from bitcoin mining and toward hosting AI/HPC hardware could unlock significant earnings upside that investors are not yet pricing in.
Key points from the report
- KBW highlights a 646 MW net HPC leasing pipeline through 2027 as the primary growth engine.
- The bank projects TeraWulf’s existing leases could drive a roughly 505% EBITDA CAGR from 2025–2027.
- That growth, KBW says, supports expansion from the stock’s current 13.8x EV/EBITDA multiple.
- The firm expects HPC leasing to account for around two-thirds or more of revenue in 2026 and to generate the bulk of contribution profit, with bitcoin mining “largely immaterial” by 2027.
- Execution risk is judged lower than many investors assume, thanks to secured financing for major builds, a proven delivery track record, and accommodating debt markets.
Shares were modestly higher in early trading Wednesday at about $11.18. KBW notes recent weakness in WULF reflects broad sector selling among bitcoin miners rather than company-specific problems, and expects those discounts to narrow as lease revenue ramps in 2026. That scaling, KBW adds, should drive cap-rate compression and valuation upside, with additional optionality from any new HPC lease announcements over the coming year.
Bottom line: KBW sees TeraWulf’s AI/HPC pivot as a potential catalyst for sharp earnings and valuation growth—if the company executes on its pipeline and continues to convert leases into revenue.
Read more AI-generated news on: undefined/news
