KBW boosts TeraWulf to outperform, highlighting AI transition as growth catalyst

KBW upgraded TeraWulf (WULF) to “outperform” from “market perform” and raised its price target to $24 from $9.50, citing the company’s shift from bitcoin mining to AI and high-performance computing (HPC) leasing as a key driver for growth.

The bank said the market is underestimating the earnings potential from TeraWulf’s pivot. Analyst Stephen Glagola wrote Wednesday, “Investors underappreciate the magnitude of the BTC mining to HPC leasing mix shift in 2026–2027 and robust growth catalysts on 646 MW net of visible HPC leasing pipeline through 2027.”

Shares were modestly higher at $11.18 in early trading. Glagola projects TeraWulf’s current HPC leases could support a 505% EBITDA CAGR from 2025 to 2027, driving potential multiple expansion from the stock’s current 13.8x EV/EBITDA valuation. HPC leasing is expected to generate roughly two-thirds of revenue in 2026 and the majority of contribution profit, with bitcoin mining becoming largely immaterial by 2027.

The report noted execution risks are lower than the market assumes, highlighting secured financing, a proven delivery track record, and supportive debt markets. KBW added that recent share weakness reflects sector-wide selling rather than company-specific fundamentals and expects discounts to narrow as lease revenues scale, with additional upside from potential new HPC deals over the next year.