U.S. KBW upgrades TeraWulf investment rating…raises target price 2.5-fold

U.S. investment bank KBW has more than doubled the target price for Bitcoin (BTC) miner TeraWulf.

On the 31st (local time), CoinDesk reported that KBW upgraded its investment rating on TeraWulf to 'Outperform.' TeraWulf's target price was raised from $9.5 to $24, about 2.5 times higher. KBW said, "The market is underestimating the potential for increased earnings at TeraWulf resulting from exiting the bitcoin mining business."

KBW expects TeraWulf's compound annual growth rate (CAGR) to grow 505% from this year through next year. It also cited selling pressure on bitcoin mining stocks, rather than the company's fundamentals, as the reason for the recent weakness in TeraWulf's share price.

CoinDesk said, "(KBW's) bullish outlook is based on a 646-megawatt (MW) high-performance computing (HPC) leasing pipeline through 2027 and the fact that the importance of bitcoin mining across (TeraWulf's) business is rapidly diminishing."

Meanwhile, TeraWulf has recently shifted its core business from bitcoin mining to hydropower-based artificial intelligence (AI) data centers. Other bitcoin miners such as Core Scientific and Iris Energy have also accelerated shifts to AI data centers as profitability has deteriorated amid bitcoin price volatility and rising mining difficulty.