Updated Aug 11 at 6:02pm ET.
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CME Group plans to launch futures contracts for AI computing power this October. These contracts act like insurance policies that allow companies to buy or sell computing capacity at a set price in the future, similar to how airlines lock in fuel costs or farmers lock in crop prices. This turns AI processing power into a tradable commodity.
This is a helpful development for TeraWulf as it pivots from mining Bitcoin to hosting AI data centers. While Bitcoin prices are easy to track and hedge, the market for AI hosting has been more opaque. Having a standardized way to trade and price computing power could make TeraWulf's future revenue more predictable and help the company secure better terms as it builds out its new facilities.
Source: CNBC
The headline numbers were mixed, with revenue of $44.8 million falling short of the $50 million analysts expected. However, the mix of that revenue is shifting fast. About 71 percent of sales now come from hosting high-performance computing, the specialized servers used for AI, rather than just mining Bitcoin. This is a key part of the plan to move away from the volatile swings of crypto toward more stable, long-term contracts.
The biggest news is a 20-year lease with Anthropic, a major AI developer, which is projected to bring in $19 billion over its life. To support this growth, the company is selling its stake in the Abernathy joint venture for $530 million to focus entirely on its own sites. While the quarterly loss was wider than expected, the focus for long-term owners is on whether the company can successfully turn its cheap power into a high-margin home for AI giants.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
The firm set a target of $32, suggesting they see significant room for the stock to rise from its current level near $18. This call comes as the company works to prove it can successfully pivot from mining Bitcoin to hosting AI data centers, which would provide more predictable and higher-margin profits.
Source: Chardan Capital
New York has put a moratorium, or a temporary freeze, on certain new data center projects. While this sounds like a problem for a company with major operations in the state, analysts suggest the impact is limited because the company already has its power and permits secured for its current expansion. For long-term owners, this looks more like a headline distraction than a threat to the company's ability to build out its AI infrastructure.
Source: Barrons
Analysts have maintained a steady stream of buy ratings following the company's recent second-quarter earnings report. All 14 analysts rate the stock a buy, with an average price target of $39 that suggests 130% upside from today's price.
The company has missed analyst earnings targets for eight straight quarters. This suggests the business is still in a heavy spending phase that makes its bottom line difficult for Wall Street to predict.
| Expectation | |
|---|---|
| EPS | $-0.19 |
| Revenue | $63M |
