From $9.5 to $24: Why KBW is Highly Optimistic About TeraWulf's HPC Transformation

Investment bank KBW issued a major upgrade on the first day of the new year. This well-known investment bank not only upgraded the rating of Bitcoin miner TeraWulf from “In line with market performance” to “Outperform,” but also raised the target stock price from $9.50 to $24, an increase of 152%. This significant adjustment reflects a reassessment of the future direction of the mining company.

How Big Is the Adjustment in Target Price

This is not a minor tweak but a substantial revaluation of TeraWulf’s value. From $9.50 to $24, KBW believes the market previously underestimated the company’s potential.

Core Logic Behind the Adjustment

KBW’s reasoning is clear and divided into two levels:

Business Transformation Was Underestimated

• Investors underestimated the extent of TeraWulf’s shift from pure Bitcoin mining to high-performance computing (HPC) leasing business
• This is not just a simple business expansion but an upgrade of the business model
• Moving from single-source mining revenue to a dual-engine model combining mining and HPC leasing

Growth Drivers for HPC Leasing Projects

• By 2027, TeraWulf plans to deploy a net 646 MW of HPC leasing projects
• This scale of HPC infrastructure will drive strong growth
• Compared to the volatility of traditional mining, HPC leasing may provide a more stable income stream

What Does This Adjustment Indicate

Diversification of Mining Companies Becomes a New Trend

TeraWulf is not the only miner exploring HPC leasing. The entire industry is realizing that relying solely on Bitcoin price fluctuations in mining models carries risks. Shifting to new businesses like HPC leasing and AI computing has become an important direction for miners seeking growth and risk mitigation.

Shift in Valuation Logic

From KBW’s adjustment, it is evident that the market’s valuation logic for mining companies is changing. No longer focusing solely on mining revenue, but on the value of the entire computing power infrastructure ecosystem. This could have a demonstrative effect on the entire mining sector.

Critical Period in 2026-2027

KBW emphasizes the importance of 2026-2027. This means that over the next two years, whether TeraWulf can effectively advance its HPC leasing projects and achieve business transformation will be key to validating the reasonableness of this adjustment.

Points to Watch Moving Forward

• Actual progress of TeraWulf’s HPC leasing projects
• When will the revenue contribution of the 646 MW HPC project become evident
• Whether other miners will follow similar transformations
• The impact of Bitcoin price volatility on miner valuations

Summary

KBW’s adjustment signals an important shift: Bitcoin miners are transitioning from pure mining operators to providers of computing infrastructure. TeraWulf’s HPC leasing strategy, from being underestimated to being optimistic, indicates increasing market recognition of this transformation. While the 152% target price increase is substantial, it also reminds us to closely monitor TeraWulf’s business execution in 2026-2027. This is not only about TeraWulf itself but also about how the entire mining sector will reposition itself in the new market environment.