WULF: Expanding High Performance Computing Contracts Will Drive Long-Term AI Infrastructure Leadership

Analysts have nudged their average price target for TeraWulf higher to about $21.50, reflecting growing confidence in the company’s expanding high performance computing contracts, strengthened power portfolio, and improving financing profile.

Analyst Commentary

Recent Street research has been overwhelmingly constructive on TeraWulf, with multiple bullish analysts lifting price targets into the high teens and low twenties as they recalibrate models for the company’s transition toward high performance computing and AI infrastructure.

Bullish analysts highlight that the business is evolving from a traditional bitcoin mining profile toward a more durable, contract-backed, AI-focused data center platform, which they see supporting higher, more resilient cash flows and a re-rating in valuation multiples.

Bullish Takeaways

• Bullish analysts see the ramp in high performance computing and AI colocation contracts, including large, long-dated hosting commitments, as significantly enhancing revenue visibility and supporting higher price targets.
• Expanded JV and colocation agreements, along with the ability to secure 250-500MW of additional capacity annually, are viewed as evidence that management can execute on an aggressive growth roadmap in a constrained power market.
• Improving financing conditions, including sizable secured note offerings priced at what some view as attractive levels, are seen as validating the TeraWulf credit profile and reducing balance sheet risk, which supports a lower cost of capital and higher valuation.
• The company’s control of high-quality, power-rich sites with access to low-cost renewable electricity and fiber networks is seen as a competitive advantage that positions it to capture a potentially outsized share of accelerating AI and GPU infrastructure demand.

Bearish Takeaways

• Some more cautious analysts point out that, despite recent contract wins and target hikes, the stock has experienced sharp volatility, suggesting execution missteps or delays could quickly pressure the shares and compress valuation multiples.
• There is concern that former bitcoin miners, including TeraWulf, may face a lengthy path before their debt and capital structures are viewed as investment grade, potentially limiting flexibility in a capital-intensive build-out cycle.
• While demand for AI and GPU infrastructure is strong, a growing set of competitors and new entrants in data center development could pressure long-term returns if pricing or contract terms normalize from today’s elevated levels.
• The strategy relies heavily on continued access to large power blocks and timely site development, so any slowdown in permitting, interconnects, or the supply chain for infrastructure could weigh on growth and delay the realization of targeted cash flows embedded in current price targets.

What's in the News

• TeraWulf executed a long term high performance computing joint venture with Fluidstack to develop 168 MW of critical IT load at its Abernathy, Texas campus, supported by a 25 year hosting commitment representing about $9.5 billion in contracted revenue, with TeraWulf holding a 51% majority stake and exclusive rights to partner on the next similar scale project.
• The joint venture will be project financed, with Google backing approximately $1.3 billion of Fluidstack long term lease obligations to support project related debt, which materially enhances the credit profile of the Abernathy build out.
• As a result of recent contracts, TeraWulf's contracted high performance computing platform now exceeds 510 MW of critical IT load, and the company has raised its growth outlook to target an additional 250 MW to 500 MW of contracted IT load per year.
• TeraWulf issued new revenue guidance for the third quarter of 2025, projecting $48 million to $52 million in revenue, an increase of about 84% compared with the $27 million reported in the third quarter of 2024.
• The company completed its previously announced share repurchase program, buying back 24,468,750 shares for approximately $151.36 million, representing 6.38% of shares outstanding under the October 2024 authorization.

Valuation Changes

• Discount Rate edged lower from about 9.05% to 8.96%, modestly increasing the present value of projected cash flows.
• Revenue Growth remained essentially unchanged at approximately 83.74%, indicating no material shift in top line expansion assumptions.
• Net Profit Margin was effectively flat at about 7.72%, suggesting stable expectations for underlying profitability.
• Future P/E ticked down slightly from roughly 177.4x to 176.9x, reflecting a marginally lower valuation multiple on forward earnings.
• Fair Value Estimate held steady at about $21.44 per share, with no change in the model derived intrinsic value despite minor parameter adjustments.