Why TeraWulf (WULF) Is Up 10.1% After Alphabet Backs $3 Billion Debt Raise

• Earlier this month, Alphabet Inc. increased its ownership stake in TeraWulf Inc. to 14% and offered a US$3.2 billion backstop for the company's planned US$3 billion debt raise starting in October.
• This move underscores Alphabet's intent to secure access to power-intensive AI infrastructure while providing institutional validation that could lower TeraWulf's future cost of capital.
• We'll examine how Alphabet's deepened financial involvement could shape TeraWulf's evolving business model and investment narrative.

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TeraWulf Investment Narrative Recap

To be a shareholder in TeraWulf, you need to believe that its pivot from pure bitcoin mining to AI and HPC hosting will fundamentally expand its addressable market and improve earnings stability. Alphabet’s increased equity stake and US$3.2 billion backstop could fortify near-term liquidity and help reduce financing costs, but the most important short-term catalyst, securing high-visibility, long-term data center leases, remains largely unchanged. Major risks, such as dependence on counterparties like Fluidstack, remain material and should not be overlooked. One of the most relevant corporate actions has been TeraWulf’s recent expansion of authorized shares to 950 million, which comes just as Alphabet deepens its involvement. This move supports the company’s ability to raise additional capital to fund rapid infrastructure growth, aligning with its efforts to meet accelerating demand in AI and digital infrastructure, but it does raise fresh questions over shareholder dilution in light of rising capital needs. Yet, investors should also keep in mind that regulatory or policy shocks affecting the AI or digital asset sectors could impact recurring revenue streams, especially if key counterparties or markets weaken...

Read the full narrative on TeraWulf (it's free!)

TeraWulf's outlook hinges on reaching $920.8 million in revenue and $157.9 million in earnings by 2028. Achieving these targets requires an 85.6% annual revenue growth rate and a $289.6 million increase in earnings from the current level of -$131.7 million.

Uncover how TeraWulf's forecasts yield a $12.86 fair value, a 8% upside to its current price.

Exploring Other Perspectives

Community fair value estimates for TeraWulf swing between US$4.84 and US$15, based on 9 member perspectives from the Simply Wall St Community. These varied outlooks invite you to consider the potential impact of large-scale institutional partnerships on both growth potential and risk exposure.

Explore 9 other fair value estimates on TeraWulf - why the stock might be worth as much as 26% more than the current price!

Build Your Own TeraWulf Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your TeraWulf research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
• Our free TeraWulf research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate TeraWulf's overall financial health at a glance.

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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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