KBW has turned decidedly bullish on crypto miner-turned-data-center operator TeraWulf, upgrading the stock to "outperform" from "market perform" and more than doubling its price target to $24 (from $9.50). Analyst Stephen Glagola argues the market is underestimating the earnings upside as TeraWulf pivots away from traditional Bitcoin mining toward leasing space for AI and high-performance computing (HPC) hardware.
KBW highlights a 646 MW HPC leasing pipeline through 2027 as the key growth engine. The bank projects that those existing leases alone could fuel a roughly 505% EBITDA CAGR from 2025–2027, and believes the shift to HPC will materially change the company’s revenue mix—driving roughly two-thirds or more of revenue in 2026 and the vast majority of contribution profit, with mining largely immaterial by 2027.
The upgrade also rests on valuation upside: TeraWulf currently trades near a 13.8x EV/EBITDA multiple, which KBW says could expand as lease revenue scales, compressing cap rates. The firm sees lower execution risk than the market assumes, pointing to secured financing for major builds, a track record of delivery and favorable debt markets supporting expansion.
TeraWulf shares were modestly higher in early trading, around $11.18, as investors digest the new thesis. KBW argues recent weakness in the stock is more a product of sector-wide selling among bitcoin miners than company-specific problems—and expects that as HPC leases ramp, discounts should narrow and valuation should re-rate.
Bottom line: KBW is betting that TeraWulf’s transition from BTC mining to AI/HPC hosting is not just strategic but transformational, creating substantial earnings upside and optionality from additional HPC deals over the next year.
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