Rothschild Redburn Sets TeraWulf Target Below Reference Price

Rothschild & Co Redburn began coverage of TeraWulf with a Neutral rating and a $15 price target. That was 11.8% below the $17.01 reference share price cited in the research note.

The firm used a discounted cash-flow model, which estimates a company’s value from expected future cash flows. Its assumptions included a 23% cost of equity and an 8% cost of debt, according to the note.

The cautious stance comes as TeraWulf shifts from Bitcoin mining toward leasing data-center capacity for high-performance computing. In the second quarter, HPC leases brought in $31.9 million, or about 71% of the company’s $44.8 million in total revenue.

The company said it had energized 102 megawatts of critical IT capacity at its Lake Mariner campus in New York by July. More capacity depends on completing construction and starting leases with customers on schedule.

A larger growth opportunity is in Kentucky. TeraWulf’s July lease with Anthropic covers about 401 megawatts at its Justified campus, but initial service is expected in the second half of 2027, with the full buildout planned by early 2028.

Redburn sees potential upside if TeraWulf secures more U.S. capacity and signs additional tenants. It also warned that permitting problems or local opposition could delay projects, slowing the move from announced capacity to revenue.

The firm’s broader concern is financing. It said credit markets are signaling risks that equity investors may be overlooking, including the debt-like commitments of major cloud companies that support AI infrastructure spending. If those companies have less room to fund expansion, demand for new data-center capacity could face a tougher test.