TeraWulf (WULF): Valuation Perspective Following Google Partnership Expansion and New Equity Investment

TeraWulf, a fast-moving player in the digital infrastructure space, has grabbed headlines this week with two important announcements that have investors talking. First, the company proposed amending its Certificate of Incorporation to boost its authorized common shares by more than 50%, suggesting preparations for fresh capital raises or ambitious new projects. Just as meaningfully, TeraWulf revealed an expanded partnership with Google and Fluidstack to supply an impressive 360 MW of IT capacity. Google also announced plans to invest $3.2 billion in exchange for a significant equity stake in TeraWulf. For shareholders, these updates highlight both growth prospects and questions about dilution and risk. The market was quick to respond. TeraWulf shares climbed 5.44% to around $10.86, with options trading activity surging and a strengthening in bullish sentiment. This comes on top of an already remarkable run, with the stock up nearly 173% over the past year and momentum building rapidly in recent months. TeraWulf’s pace of business expansion, propelled by high-profile collaborations and a drive for more infrastructure, remains closely tied to its ambitious funding efforts. With the share price surging and ambitious capital plans in motion, investors are closely watching to see whether the market is already pricing in TeraWulf's next phase of growth.

Most Popular Narrative: 11.7% Undervalued

The prevailing narrative suggests that TeraWulf stock is undervalued, with its fair value estimated to be over 11% above the current share price. This assessment is based on expectations of rapid future earnings and revenue growth, along with transformative sector partnerships.

Long-term partnerships and investments from marquee players (Google's $1.8B lease backstop and equity stake) signal institutional validation, enhance creditworthiness, and are likely to lower WULF's future cost of capital. This directly supports margin expansion and accelerated infrastructure growth.

Curious how this bold target is set? The most popular narrative hints at ambitious revenue expansion, rising profitability, and a premium valuation multiple rarely seen outside the hottest corners of tech. Want to find out which aggressive growth assumptions and financial forecasts are fueling this optimism? The answers and the numbers might just surprise you.

Result: Fair Value of $12.18 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative faces potential catalysts, including execution risks related to rapid expansion and uncertainties in demand for AI and HPC hosting services.

Find out about the key risks to this TeraWulf narrative.

Another View: What Do Market Ratios Suggest?

While the analyst narrative finds TeraWulf undervalued, a look at its price-to-sales ratio compared to the industry average tells a more cautious story. In this comparison, the stock appears expensive. Which approach is more convincing for you?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding TeraWulf to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own TeraWulf Narrative

If you feel differently about the outlook or would rather dive into the numbers on your own terms, it only takes a few minutes to craft your personal perspective. Do it your way

A great starting point for your TeraWulf research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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