Investment bank KBW upgraded TeraWulf (WULF) to “outperform” from “market perform,” while raising its price target to $24 from $9.50.
The bank said the market is underestimating the gains from the company’s move away from bitcoin. mining towards AI and high-performance computing (HPC) leasing.
“We believe investors underestimate the magnitude of the change in the mix of BTC mining and HPC leasing in 2026-2027 and the strong growth catalysts in 646 net MW of visible HPC leasing portfolio through 2027,” analyst Stephen Glagola wrote in Wednesday’s report.
Shares rose modestly in early trading Wednesday, to $11.18.
Bitcoin miners have increasingly chosen to host AI and high-performance computing hardware in their existing data centers to increase profitability.
The analyst estimated that TeraWulf’s existing leases could drive an EBITDA compound annual growth rate (CAGR) of 505% from 2025 to 2027 and support multiple expansion from the stock’s current 13.8x EV/EBITDA valuation.
His bullish view focuses on the company’s 646-megawatt HPC leasing portfolio through 2027 and the rapid erosion of mining’s importance to the business.
The bank expects HPC leasing to generate about two-thirds or more of TeraWulf’s revenue in 2026 and the vast majority of contribution profits, with mining becoming largely irrelevant by 2027.
The report says execution risk is lower than investors assume, citing secured financing for large builds, a track record of delivery and favorable debt markets. The recent share price weakness reflects sector-wide sales of bitcoin miners rather than company-specific fundamentals.
KBW said those discounts should narrow as rental income increases in 2026, driving cap rate compression and valuation upwards, with more options coming from announcements of new HPC deals over the next year.
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