TeraWulf received a major vote of confidence at year-end after a sharp reassessment of its long-term earnings trajectory.
A strategic shift away from pure bitcoin mining toward artificial intelligence infrastructure is now reshaping how analysts value the company.
Price Target Raised to $24 as Strategy Shifts
On December 31, 2025, KBW upgraded TeraWulf to “outperform” from “market perform.” Alongside the rating change, KBW lifted its price target for WULF shares to $24, up sharply from the prior $9.50.
The upgrade reflects a fundamental change in how the bank views TeraWulf’s business model. Rather than treating the company primarily as a bitcoin miner, KBW now sees AI and high-performance computing leasing as the dominant value driver over the next several years.
AI and HPC Leasing Set to Overtake Mining
KBW analysts argue the market is materially underestimating the earnings power of TeraWulf’s pivot toward AI and HPC leasing. According to the report, lease-based revenues are expected to surpass bitcoin mining as the company’s main income source as capacity comes online.
That transition is already underway. TeraWulf has been selling portions of its Bitcoin holdings in recent quarters to fund infrastructure development, accelerating its move toward becoming an AI-focused data center operator rather than a cyclical mining business.
The scale of the build-out is significant. The company’s total contracted HPC capacity now exceeds 510 megawatts of critical IT load, providing a large base for recurring lease revenue as demand ramps.
EBITDA Forecast Signals Explosive Growth
KBW’s confidence is reflected most clearly in its earnings projections. The bank forecasts a 505% EBITDA compound annual growth rate between 2025 and 2027, driven by the rapid scaling of AI and HPC lease revenues.
The report also downplays execution concerns. Analysts note that financing for major build-outs is already secured, debt markets remain supportive, and management has demonstrated a consistent ability to deliver projects on schedule. These factors, KBW argues, reduce execution risk relative to prevailing investor assumptions.
Valuation Discounts Seen Narrowing in 2026
As AI-focused lease revenues begin to scale meaningfully in 2026, KBW expects current valuation discounts on WULF shares to compress. The bank believes this normalization process underpins the substantial upside implied by the new $24 price target.
In KBW’s view, TeraWulf is transitioning from a volatile, commodity-exposed miner into a contracted infrastructure provider with more predictable cash flows. If execution continues as planned, the firm sees AI infrastructure, not BTC price cycles, becoming the dominant force behind the stock’s valuation.
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