Bank of America Securities has initiated coverage on TeraWulf (WULF), a digital infrastructure company, with a "Buy" rating and a $34 price target, signaling strong confidence in its strategic direction.
This positive outlook is rooted in two powerful, intersecting trends. First, the AI boom is creating an almost insatiable demand for computing power, which in turn requires enormous amounts of electricity and specialized data centers. This surge is straining the U.S. power grid, making sites with secured power access incredibly valuable. Second, companies that traditionally focused on mining Bitcoin are pivoting their business models. Instead of relying on volatile crypto revenue—especially with Bitcoin's recent price dip—they are leasing their powerful infrastructure for High-Performance Computing (HPC) tasks that fuel AI development. This shift offers a steadier, more predictable stream of contracted revenue.
TeraWulf’s transformation has been a deliberate, multi-step process. The foundation was laid in late 2025 when the company secured long-term HPC contracts, notably with credit backing from Google, which significantly de-risked the financial model. Then, in early 2026, TeraWulf made its big move, acquiring large-scale sites in Kentucky and Maryland to build a multi-gigawatt pipeline for future growth. Throughout the spring, the company demonstrated its ability to execute by securing power agreements, raising capital, and bringing on construction partners like Fluor.
The strategy's success became tangible in the first quarter of 2026, when TeraWulf reported approximately $21 million in revenue from its new HPC business at its Lake Mariner facility. This was the hard evidence that its pivot was working. However, the path forward isn't entirely clear. The company needs approval from the Federal Energy Regulatory Commission (FERC) for its key Morgantown site, a process facing scrutiny over corporate disclosures. BofA's decision to issue a "Buy" rating, even with this regulatory overhang, suggests the bank views these risks as manageable.
Ultimately, BofA's $34 price target is a forward-looking valuation. It's based on projections for 2028 revenue, assuming TeraWulf successfully develops its pipeline in Kentucky and Maryland and signs up anchor tenants. In essence, BofA’s thesis is a bet that TeraWulf’s pivot from a volatile crypto miner to a stable AI infrastructure provider is the right move at the right time, positioning it to capture a significant share of the AI-driven demand for power and computing.
- Glossary
- High-Performance Computing (HPC): The use of supercomputers and parallel processing techniques for solving complex computational problems. In this context, it refers to the massive computing power needed to train and run AI models.
- Federal Energy Regulatory Commission (FERC): An independent agency of the U.S. government that regulates the interstate transmission of electricity, natural gas, and oil. Its approval is critical for major energy infrastructure projects.