KBW Upgrades TeraWulf to Outperform, Sees AI Leasing as Key Growth Driver
KBW has upgraded its rating on TeraWulf (WULF) to outperform, raising the price target from $9.50 to $24. The investment firm highlights the company's pivot towards AI and high-performance computing (HPC) leasing as a major catalyst for sharp growth.
TeraWulf's HPC leasing pipeline, with 646 MW secured through 2027, is expected to drive lease revenues that will scale significantly in 2026 and 2027. This shift is anticipated to eclipse Bitcoin mining as the main driver of earnings. HPC leasing is projected to generate about two-thirds or more of TeraWulf's revenue in 2026 and account for the vast majority of contribution profit by 2027, with traditional mining activities becoming largely immaterial by that time.
The company's existing leases could support a 505% compound annual growth rate (CAGR) in EBITDA from 2025 to 2027, offering considerable valuation upside. KBW views execution risk as reduced given TeraWulf's secured financing, track record of deliveries, and favorable debt market conditions. The recent weakness in share price, trading around $11.18 in early trading, is attributed to sector-wide Bitcoin miner selling rather than underlying fundamentals.
TeraWulf currently trades at an enterprise value to EBITDA multiple of about 13.8x, and the raised price target implies substantial upside from current levels.
