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Needham maintained its buy rating on the company and set a price target of $25. This target is well above the current price of about $13.50, though it sits below the average analyst target of $34. This move reflects a focus on the company's transition from mining Bitcoin to leasing out data centers for AI work. While price targets are just estimates of where a stock might trade in a year, the rating shows the firm remains confident in the company's ability to build out its large power pipeline.
Source: Needham
After TeraWulf reported its November results, we updated our fair value and raised our quality score to 4.3. We have moved our rating to Buy as the business completes its shift from bitcoin mining into hosting powerful computers for artificial intelligence. We have added the cost of project financing to what we track, specifically the credit backstop provided by Google that lowers the risk of building new data centers. We also added the sale of the company's interest in the Nautilus mining site to our model and updated our expectations for how much revenue now comes from long term leases.
TeraWulf is successfully shifting from a Bitcoin miner to a provider of power for AI data centers. Leasing space for high-performance computing now accounts for 83 percent of its revenue, bringing in 63 million dollars this quarter. This shift provides more stable income than the volatile business of mining digital currency.
The company is also expanding its footprint, with 102 megawatts of power capacity currently online and another 336 megawatts under construction. This infrastructure is the core of its value, as it provides the massive amounts of electricity needed to run AI models. Management reaffirmed its goal to keep adding 250 to 500 megawatts of capacity every year.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
TeraWulf signed a contract with Fluor, a major engineering and construction firm, to build a large data center campus in Kentucky. This is a step toward the company's goal of moving beyond Bitcoin mining and into high-performance computing, which provides the power and cooling needed for AI work.
While the company is known for mining Bitcoin, its real value is increasingly tied to its access to massive amounts of power. Hiring a firm like Fluor to handle the design and construction suggests the company is moving forward with its plan to turn that power into stable, long-term hosting for AI customers.
Source: Business Wire
TeraWulf reached a deal with Google to provide credit support for its 20-year lease with AI firm Anthropic. Under the agreement, Google will backstop Anthropic's rent payments at the Hawesville, Kentucky campus. If Anthropic fails to pay or runs into financial trouble, Google has the option to take over the lease or pay a termination fee.
This is a major win for TeraWulf's pivot from Bitcoin mining to AI data centers. By having a giant like Google guarantee the rent, TeraWulf can likely secure much cheaper loans to build the facility. The project is massive, covering 401 megawatts of power capacity, and is expected to start coming online in late 2027.
Source: 8-K filing
Management has consistently missed its own targets for years, but this latest report is the first sign that the business is finally outrunning its own forecasts as the AI pivot takes hold.
| Expectation | |
|---|---|
| EPS | $-0.15 |
| Revenue | $95M |