TeraWulf (NASDQ:WULF) shares rose 8% after Bank of America initiated coverage of the company with a Buy rating and a $34 price objective, citing its transition from bitcoin mining to AI-focused high-performance computing infrastructure as a key value driver.
Analysts said TeraWulf is developing digital infrastructure to meet surging AI demand, with a pipeline expected to reach between 1.8 and 3 gigawatts of critical IT load capacity by 2030.
Capacity is projected to ramp from 60 megawatts in the first quarter of 2026 to 522MW by year-end 2026 and approximately 822MW in 2027, with revenue forecast to grow from $226 million in 2026 to $1.1 billion in 2027 and $1.8 billion in 2028. EBITDA is expected to inflect from $63 million in 2026 to $686 million in 2027 and $1.25 billion in 2028, with net operating income margins reaching approximately 85%. Long-duration leases, including 25-year agreements, are expected to underpin contracted growth and cash flow visibility.
Analysts framed the initiation within a broader view of the data center sector, noting that the global data center total addressable market is projected to grow from $275 billion in 2025 to $1 trillion by 2030, driven by AI, cloud computing, and the digitalization of the global economy.
Bank of America said TeraWulf's focus on power and transmission infrastructure when selecting development sites makes it an attractive partner for hyperscalers operating in power-constrained markets.
Near-term catalysts include completing developments at Lake Mariner by year-end 2026 and the announcement of a customer for its Justified Data facility in Kentucky.
The bank flagged financing access, construction delays, and tenant timing as the primary risks to its outlook, noting that a 10% to 20% slowdown in megawatt delivery could cut 2028 revenue estimates by roughly 6% to 12%.