Funding financial institution KBW upgraded TerraWolf (WULF) from “market carry out” to “outperform” and raised its worth goal from $9.50 to $24.
The financial institution mentioned the market was underestimating the upside from its transition away from Bitcoin. BTC$88,518.75 Mining leases for AI and excessive efficiency computing (HPC).
“We consider buyers are underestimating the magnitude of the combo shift from BTC mining to HPC leasing in 2026-2027 and the robust development catalyst for a complete seen HPC leasing pipeline of 646MW via 2027,” analyst Stephen Glagola mentioned in a report on Wednesday.
Shares have been barely larger in early buying and selling Wednesday at $11.18.
Bitcoin miners are more and more specializing in internet hosting AI and high-performance computing {hardware} in current knowledge facilities to extend profitability.
The analyst estimated that Terrawolf's current leases may drive a compound annual development price (CAGR) of 505% from 2025 to 2027, supporting a number of expansions from its present EV/EBITDA valuation of 13.8x.
His bullish view facilities on the corporate's 646 MW HPC lease pipeline via 2027 and the quickly declining significance of mining to the enterprise.
The financial institution expects HPC leasing to generate about two-thirds or extra of TeraWulf's income and the vast majority of its contribution margin in 2026, and expects mining to change into largely insignificant by 2027.
The report mentioned execution threat was decrease than buyers anticipated, citing safe financing for large-scale development, a observe document of supply and a supportive debt market. The current share worth weak point displays a sector-wide sell-off in Bitcoin miners moderately than company-specific fundamentals.
KBW mentioned these reductions ought to slender as lease revenues develop in 2026, driving cap price compression and valuation beneficial properties, with additional choices added over the subsequent yr via new HPC contract bulletins.
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