Funding financial institution KBW upgraded TerraWolf (WULF) from “market carry out” to “outperform” and raised its value goal from $9.50 to $24.
The financial institution stated 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 progress catalyst for a complete seen HPC leasing pipeline of 646MW via 2027,” analyst Stephen Glagola stated in a report on Wednesday.
Shares have been barely increased 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 present information facilities to extend profitability.
The analyst estimated that Terrawolf’s present leases may drive a compound annual progress 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 turn out to be largely insignificant by 2027.
The report stated execution danger was decrease than buyers anticipated, citing safe financing for large-scale development, a observe file of supply and a supportive debt market. The latest share value weak point displays a sector-wide sell-off in Bitcoin miners fairly than company-specific fundamentals.
KBW stated 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 following yr via new HPC contract bulletins.
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