KBW upgrades TeraWulf, cites AI and HPC leasing pivot as key growth driver

Investment bank KBW upgraded TeraWulf to "outperform" from "market perform" and raised its price target to $24 from $9.50.

Analyst Stephen Glagola said the market is underestimating the earnings upside from TeraWulf’s shift away from bitcoin mining toward AI and high‑performance computing (HPC) leasing.

KBW highlighted a 646 megawatt HPC leasing pipeline through 2027 and said HPC leasing could account for roughly two‑thirds or more of TeraWulf’s revenue in 2026 and the bulk of contribution profit, with mining becoming largely immaterial by 2027.

Glagola estimated existing leases could drive a 505% EBITDA compound annual growth rate from 2025 to 2027 and support multiple expansion from the stock’s current 13.8x EV/EBITDA valuation. The shares were modestly higher in early trading at $11.18.

The bank said execution risk is lower than investors assume, pointing to secured financing for major build‑outs, a delivery track record and supportive debt markets, and added that recent share weakness reflects sector‑wide selling rather than company fundamentals.

KBW expects discounts to narrow as lease revenues scale in 2026, producing cap‑rate compression and valuation upside, with further optionality from new HPC deal announcements over the next year.

Key Topics

Crypto, Business, Ai, Data Centers, Hpc, Stocks