TeraWulf (NASDAQ: WULF) shares jumped more than 17% in premarket trading Monday after the AI infrastructure developer announced a landmark 20-year lease agreement with Anthropic for a large-scale data center in Kentucky. The deal is expected to generate approximately $19 billion in revenue over its initial term, underscoring the accelerating demand for high-performance computing capacity.
The facility, located about an hour southwest of Louisville, will provide roughly 400 megawatts of capacity. First power delivery is scheduled for the second half of 2027, with the campus ramping to full 401 MW by early 2028. This represents one of the largest long-term AI infrastructure commitments announced this year.
Strategic Pivot from Bitcoin Mining
TeraWulf has increasingly shifted its focus away from cryptocurrency mining as falling Bitcoin mining economics have encouraged miners to repurpose their power infrastructure for AI and high-performance computing workloads. The company's shares have climbed more than 66% year-to-date and over 340% in the past 12 months as investors have embraced this strategy.
Signs that the transition is paying off emerged in the company's first-quarter earnings released in May. High-performance computing leases generated $21 million in revenue during the quarter, comfortably ahead of Wall Street estimates of $18.6 million. A year earlier, the company generated no AI lease revenue. However, overall quarterly revenue edged lower to $34 million from $34.4 million a year ago, and TeraWulf reported a wider-than-expected loss of $1.01 per share, compared with a loss of 16 cents a year earlier. Analysts had expected a loss of about 20 cents.
Analyst Optimism and Balance Sheet Strength
Despite the earnings miss, encouraging numbers related to its HPC lease revenue have prompted several Wall Street firms to initiate bullish coverage. Citi recently launched coverage with a Buy rating and a $36 price target, implying roughly 39% upside from Friday's closing price. Citi analyst Michael Rollins noted that supply constraints for large-scale deployments are not immediately abating, and TeraWulf is one of several companies addressing the bottleneck by converting industrial sites with existing grid access into hyperscale AI facilities.
BofA Securities initiated coverage last month with a Buy rating and a $34 price target, arguing that the company's move from traditional Bitcoin mining into AI infrastructure positions it to benefit from accelerating demand for high-performance computing. Bernstein previously began coverage with an Outperform rating and a $46 price target, citing the company's growing project pipeline and capital-light leasing model. Citizens has reiterated a Market Outperform rating with a $32 target.
TeraWulf has also strengthened its balance sheet to support its AI ambitions. The company recently completed a $3.2 billion high-yield bond sale to finance expansion of its Lake Mariner campus in New York. The financing is backed by Google as guarantor once the facility becomes operational, adding credibility to TeraWulf's infrastructure platform.
Separately, TeraWulf said it had entered into a definitive agreement to sell its 50.1% ownership interest in the Abernathy Joint Venture to an investor group led by its joint venture partner, Fluidstack. The transaction monetizes its approximately $450 million investment at a premium to invested capital, freeing up additional funds for expansion of wholly owned AI infrastructure projects.
For more on the broader data center landscape, see our article on Local Opposition Blocks $130B in Data Center Projects, Threatening AI Infrastructure Boom. Additionally, check out Bitget CEO Gracy Chen Unveils Long-Term Vision Centered on AI, Tokenization, and Unified Global Market Access for more on AI-driven market trends.
This article is for informational purposes only and does not constitute financial advice.
