Investment bank Keefe, Bruyette & Woods (KBW) issued a major upgrade for Bitcoin mining company TeraWulf on December 31, 2025, shifting its rating to "outperform" from "market perform" and raising its share price target to $24 from $9.50. The bank's reassessment is based on a belief that investors are undervaluing the company's strategic shift from Bitcoin mining toward artificial intelligence (AI) and high-performance computing (HPC) leasing.
KBW's report highlights that the market has not fully priced in the "magnitude of the BTC mining to HPC leasing mix shift in 2026-2027." The bank projects that lease-based revenues will surpass Bitcoin mining as TeraWulf's primary income source. This transition is supported by a visible HPC leasing pipeline of 646 megawatts (MW) net capacity through 2027, with total contracted capacity already exceeding 510 MW.
The financial implications are significant. KBW forecasts an explosive 505% compound annual growth rate (CAGR) in EBITDA between 2025 and 2027, driven by the scaling AI/HPC business. The bank argues that secured financing for build-outs, supportive debt markets, and consistent project execution reduce perceived risks, enabling potential multiple expansion on the company's current valuation.
This strategic pivot is already in motion. In recent quarters, TeraWulf has been selling portions of its Bitcoin holdings to fund infrastructure development. The company also secured a $3.2 billion deal for a New York data center expansion in October and three lease agreements with AI infrastructure provider Fluidstack worth a combined $6.7 billion.
At the time of the report, TeraWulf shares (WULF) were trading at $11.46, having risen about 2.8% in the prior 24 hours. In contrast, shares of another major miner, Marathon Digital Holdings (MARA), fell approximately 2.4% over the same period.
