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Can TeraWulf’s (WULF) Pivot Beyond Bitcoin Mining Secure Its Future?

TeraWulf Inc. (NASDAQ:WULF) is one of the most shorted stocks right now. While TeraWulf is diversifying its business, a significant exposure to the bitcoin mining business makes it vulnerable to the volatility in cryptocurrency markets. That said, the company has seen a strong performance over the last year, and so far this year, it has continued to perform well (+67% YTD).

On August 22, Rosenblatt analyst Chris Brendler raised his price target on TeraWulf Inc. (NASDAQ:WULF) to $12 from $10.50 and reiterated a Buy rating. Brendler pointed to a new partnership with Fuidstack in high-performance computing that expands TeraWulf’s reach beyond Bitcoin mining, as well as the positive cross-read from a related investment by Google as a strategic technology backer. He believes these developments materially strengthen the company’s earnings outlook and justify a higher valuation multiple, positioning the stock for further upside.

TeraWulf Inc. (NASDAQ:WULF) announced the aforesaid Fluidstack agreement on August 14, which represents more than 200 MW of contracted hyperscale colocation capacity at TeraWulf’s Lake Mariner campus, with a projected value of $3.7 billion over the initial 10-year term. The deal is structured to generate approximately $370 million in predictable annual revenue, with NOI margins of nearly 85%. Google is backing $1.8 billion of Fluidstack’s obligations, underscoring the credibility of the arrangement and reducing financing risk.

TeraWulf Inc. (NASDAQ:WULF) is a U.S.-based digital asset and computing infrastructure company. It operates Bitcoin mining facilities mainly powered by zero-carbon energy and is expanding into high-performance computing services.

While we acknowledge the potential of WULF to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than WULF and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 Best Stocks for a 20 Year Long-Term Stock Portfolio and 12 Overlooked Large-Cap Stocks with Low Multiples.

Disclosure: None. This article is originally published at Insider Monkey.

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