Why TeraWulf (WULF) is up today: KBW upgrade, AI leasing pivot, and $1.3B Texas financing
TeraWulf gained about 4.4%, trading near $11.64 after KBW upgraded the stock to Outperform and lifted its price target to $24 from $9.50. The call leans into a clear shift: crypto miners are increasingly being valued as power-and-real-estate platforms with optionality, not pure bitcoin proxies.
The pivot that's getting priced in
KBW says the market is underestimating the earnings upside from TeraWulf's move away from bitcoin mining and toward AI and high-performance computing (HPC) leasing. The firm highlighted a visible 646 MW HPC leasing pipeline through 2027 and pointed to existing leases that could drive a 505% EBITDA CAGR through 2027.
The upside case is simple: contracted data-center capacity can stabilize cash flow versus bitcoin-linked revenue. The catch is execution risk-buildouts must hit dates, power must be available, and customers must ramp as planned.
$1.3B notes to build Abernathy, Texas
A Dec. 29 filing detailed a $1.3 billion private offering of 7.25% senior secured notes due 2030, issued by Flash Compute LLC, a unit of a joint venture in which a TeraWulf subsidiary owns 50.1%. Proceeds will fund construction of the Abernathy, Texas HPC campus, plus related reserves and collateral.
These are senior secured bonds-first in line to collateral-and were placed under Rule 144A with institutional buyers. For capital-intensive data-center builds, locking fixed-rate funding against hard assets matches how many investors now underwrite this category.
Why finance, real estate, and construction teams care
- Lease economics: HPC leases can bring higher visibility to revenue versus mining. Watch term length, pricing escalators, and any take-or-pay mechanics.
- Power and grid: Interconnection timing, contracted power costs, and curtailment exposure will drive returns as much as rent.
- Cost of capital: 7.25% fixed to 2030 sets a reference point for the project's hurdle rate and debt service coverage.
- Delivery risk: Schedules for site work, substations, cooling, and fiber are critical; any slippage can push customer ramp dates and cash flow.
- Collateral and structure: Senior secured positioning matters if the cycle turns. Covenant room and reserve levels can cushion build timelines.
Market backdrop
Bitcoin slipped about 0.7% to $87,909, and the SPDR S&P 500 ETF was off roughly 0.2% in early New York trading. Miners were mixed: Marathon Digital fell ~1.2%, Riot Platforms ~0.3%, while Cipher Mining traded slightly higher. TeraWulf traded between $11.07 and $11.88 with roughly 4.8 million shares changing hands-outperforming both peers and crypto on the day.
What to watch next
- Construction milestones and energized capacity at Abernathy, Texas
- Customer ramp timing and additional HPC leasing announcements
- Updates on power availability, interconnect progress, and any changes to project reserves or collateral
- Unit economics: delivered $/MW, utilization, and lease duration as capacity comes online
If you're benchmarking AI buildouts and tooling on the finance side, this curated list can help frame the opportunity set: AI tools for finance.
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