KBW Upgrades TeraWulf Stock as AI and HPC Strategy Drives Long-Term Growth Outlook

Investment bank KBW has upgraded TeraWulf (NASDAQ: WULF) to “outperform” from “market perform,” while sharply increasing its price target to $24 from $9.50, signaling strong confidence in the company’s evolving business model. According to KBW, the market is significantly undervaluing TeraWulf’s earnings potential as it transitions away from traditional bitcoin mining toward artificial intelligence (AI) and high-performance computing (HPC) data center leasing.

In a research note released Wednesday, KBW analyst Stephen Glagola highlighted that investors are underestimating the scale and impact of TeraWulf’s shift in revenue mix, particularly over the 2026–2027 period. The company is increasingly focusing on leasing its energy-intensive data center infrastructure to AI and HPC customers, a move that could materially reshape its financial profile. KBW pointed to a visible 646-megawatt HPC leasing pipeline through 2027 as a major growth driver, noting that this capacity underpins strong long-term earnings visibility.

The analyst estimates that existing leasing agreements alone could fuel a compound annual growth rate of approximately 505% in EBITDA between 2025 and 2027. This rapid earnings expansion could also support valuation multiple expansion from the stock’s current 13.8x EV/EBITDA, which KBW views as discounted relative to the company’s future cash flow potential. The bank expects HPC leasing to account for roughly two-thirds or more of TeraWulf’s revenue in 2026 and generate the majority of contribution profit, with bitcoin mining becoming largely immaterial by 2027.

KBW also addressed execution risk concerns, arguing they are lower than widely perceived. The report cited secured financing for major build-outs, TeraWulf’s track record of project delivery, and supportive debt markets as key risk mitigants. Recent weakness in WULF shares, which traded modestly higher around $11.18 in early Wednesday trading, was attributed to broader sector selling among bitcoin miners rather than company-specific issues.

As AI demand accelerates, KBW believes valuation discounts should narrow as lease revenues scale in 2026, with additional upside possible from new HPC leasing deals announced over the next year.