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 earnings upside from the company’s shift away from bitcoin mining against AI and high-performance computing (HPC) leasing.
“We believe investors are underestimating the magnitude of the shift from BTC mining to HPC leasing mix in 2026-2027 and robust growth catalysts of 646 MW net of visible HPC leasing pipeline through 2027,” analyst Stephen Glagola wrote in Wednesday’s report.
Shares were modestly higher in early trading Wednesday at $11.18.
Bitcoin miners have increasingly turned to hosting AI and high-performance computing hardware in their existing data centers to increase profitability.
The analyst estimated that TeraWulf’s existing leases could drive a 505% EBITDA compound annual growth rate (CAGR) from 2025 to 2027 and support multiple expansion from the stock’s current 13.8x EV/EBITDA valuation.
His bullish view centers on the firm’s 646 megawatt HPC leasing pipeline through 2027 and the rapid erosion of mining’s importance to the company.
The bank expects HPC leasing to generate around two-thirds or more of TeraWulf’s revenue in 2026 and the vast majority of contribution profit, with mining largely immaterial by 2027.
The report said execution risk is lower than investors assume, citing secured financing for major developments, a delivery track record and supportive debt markets. Recent share price weakness reflects cross-sector selling in bitcoin miners rather than company-specific fundamentals.
KBW said these discounts should narrow as rental income scales in 2026, leading to compression and valuation at the cap, with further options from new HPC deal announcements over the next year.
Read more: The AI trade isn’t dead: A look at Wall Street’s lucrative data center deals
