A major United States investment bank has upgraded its outlook for Bitcoin miner TeraWulf, citing expectations of a significant shift in its revenue mix.
Keefe, Bruyette & Woods said investors have not fully priced in the company’s longer-term growth strategy.
In a Wednesday research note, the bank upgraded TeraWulf shares to “outperform” from “market perform.”
The analysts also raised the company’s share price target to $24 from a previous level of $9.50.
Keefe, Bruyette & Woods said the revision reflects underappreciated changes expected between Bitcoin mining and high-performance computing leasing.
The bank expects the transition to accelerate during the 2026 to 2027 period.
Analysts highlighted a projected 646 megawatts of capacity linked to TeraWulf’s visible high-performance computing leasing pipeline through 2027.
The report said the company’s joint artificial intelligence and HPC strategy is already contributing to operating profitability.
We estimate existing leases drive a +505% 2025-2027 EBITDA CAGR and positive inflection in pre-tax ROIC, enabling multiple expansion on the current 3.8x EV/EBITDA multiple on our street high 2027 estimate.
KBW said.
The bank also addressed the recent decline in TeraWulf’s share price.
We think the primary culprit of WULF's -34.6% decline from its 52-week high on 10/28 has been the largely indiscriminate selling of Bitcoin mining stocks against weakening Bitcoin mining fundamentals.
KBW said.
In October, TeraWulf announced a $3.2 billion data centre expansion at a New York facility.
The company also secured three lease agreements with AI infrastructure provider Fluidstack.
Those leases were valued at a combined $6.7 billion.
At the time of reporting, Bitcoin price was $87,559.34.