Funding financial institution KBW upgraded TeraWulf (WULF) to “outperform” from “market carry out,” whereas elevating its worth goal to $24 from $9.50.
The financial institution stated the market is underestimating the positive factors from the corporate’s transfer away from bitcoin. btc$88,518.75 mining in the direction of AI and high-performance computing (HPC) leasing.
“We imagine traders underestimate the magnitude of the change within the mixture of BTC mining and HPC leasing in 2026-2027 and the sturdy development catalysts in 646 web MW of seen HPC leasing portfolio via 2027,” analyst Stephen Glagola wrote in Wednesday’s report.
Shares rose modestly in early buying and selling Wednesday, to $11.18.
Bitcoin miners have more and more chosen to host AI and high-performance computing {hardware} of their present knowledge facilities to extend profitability.
The analyst estimated that TeraWulf’s present leases might drive an EBITDA compound annual development fee (CAGR) of 505% from 2025 to 2027 and help a number of growth from the inventory’s present 13.8x EV/EBITDA valuation.
His bullish view focuses on the corporate’s 646-megawatt HPC leasing portfolio via 2027 and the speedy erosion of mining’s significance to the enterprise.
The financial institution expects HPC leasing to generate about two-thirds or extra of TeraWulf’s income in 2026 and the overwhelming majority of contribution income, with mining turning into largely irrelevant by 2027.
The report says execution danger is decrease than traders assume, citing secured financing for big builds, a monitor file of supply and favorable debt markets. The current share worth weak point displays sector-wide gross sales of bitcoin miners moderately than company-specific fundamentals.
KBW stated these reductions ought to slim as rental earnings will increase in 2026, driving cap fee compression and valuation upwards, with extra choices coming from bulletins of latest HPC offers over the subsequent 12 months.
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