TeraWulf: Bitcoin Miner To HPC Powerhouse - Dip-Buying Opportunity Ahead

Summary TeraWulf's timely transition to HPC opportunities has been backed by the insatiable cloud demand and the higher data center-related capex ￰0￱ is especially since bitcoin miners face increasingly expensive operations from the April 2024 halving, the volatility arising from cryptocurrency trade, and the reduced supply moving ￰1￱ has strategically leveraged its existing infrastructure across low-cost, predominantly zero-carbon power, racks, and cooling systems, along with a veteran energy infrastructure management ￰2￱ to the early days of its HPC prospects, the stock boasts relatively cheap FY 2027 valuations compared to its legacy hyperscaler/neocloud/data center REIT peers as ￰3￱ TeraWulf's elevated trading volumes, the drastically higher short interest volume, and the tariff risks into the Q3 2025 earnings call, there may be an excellent dip buy opportunity ￰4￱ Remains Attractively Valued Despite The Recent Rally, Thanks To Its Outsized HPC Prospects & Rich Funding I previously covered the Big Tech hyperscalers and neoclouds in numerous older articles, discussing their monetization prospects during the AI and data center capex ￰5￱ this article, I shall be covering TeraWulf Inc.

(NASDAQ: WULF ) and sharing my findings about the stock, continuing the theme surrounding the cloud ￰6￱ the uninitiated, WULF is a company that was previously generating revenue as a Bitcoin miner and by hosting third-party Bitcoin miners before diversifying to be an infrastructure provider in 2024 for High Performance Computing HPC workloads during the ongoing multi-year cloud super ￰7￱ is a trend that I have previously observed with CoreWeave ( CRWV ), which used to be a cryptocurrency mining company in 2017 before transitioning to be a cloud computing provider after the cryptocurrency crash in 2019. Notably, CRWV has announced its plans to acquire another cryptocurrency mining/HPC company, Core Scientific ( CORZ ), for $9B, attributed to the attractiveness of the latter's " energy-heavy sites and power contracts to expand computing infrastructure," with the deal effectively valuing the latter at an annualized FQ2 2025 EV/sales valuations of ￰8￱ the insatiable demand for compute power and the ongoing AI boom across the infrastructure/SaaS layers, it is unsurprising that five of the world's largest hyperscalers by market share, Amazon ( AMZN ), Microsoft ( MSFT ), Google ( GOOG ), Alibaba ( BABA ), and Oracle ( ORCL ) in respective order, have been reporting robust cloud-related revenues while hinting at higher data center/AI chip-related capex trends in ￰9￱ same has also triggered the emergence of neoclouds, such as CRWV and Nebius Group ( NBIS ), as they offer AI-focused infrastructure as a service through GPU-backed ￰10￱ is where WULF has stood out uniquely, attributed to its strategic decision to simply offer infrastructure (including low-cost, predominantly zero-carbon power along with data center infrastructure including racks, cooling systems, and other ancillary services) with the cloud tenants to provide the " gut ," i.

e., the GPUs. I believe that this is a highly strategic decision indeed, since GPUs are typically prohibitively expensive and tight in supply, with it likely to trigger slim profit margins as similarly observed in another cloud provider, ORCL, at a gross profit margin of ~14% for " rentals of servers powered by Nvidia's ( NVDA ) chips." Combined with the AI GPU's accelerated depreciation costs , the " significant stress " on data center chips potentially triggering an intensified replacement cycle, and NVDA's choice to release new AI chips annually, I believe that WULF's ongoing pivot to HPC provider has been rather well thought ￰11￱ development implies that WULF may very well maintain its balance sheet health with a cash position of $89.99M ( -58.7% QoQ / -13.5% YoY ) aside from the Convertible Notes of $488.71M maturing in 2030, $1B in 2031 , and $3.2B backing from GOOG without going into significant GPU-related capex as that observed with ￰12￱ is on top of the much needed diversification away from the bitcoin mining operations, attributed to: The cryptocurrency's halving event in 2024 (typically reducing the reward for mining new blocks by 50%, which impacts the supply and potentially the price of Bitcoin), The volatility arising from the bitcoin trade/ prices, and The reduced supply of Bitcoins to be mined at 1.07M moving forward (~5% of overall supply at 21M).

WULF 1Y Stock Price TradingView Combined with the ongoing AI mania and the consistently higher leasing price per KW of data center capacity at $218 in FQ2 2025 ( +23.8% YoY / +77.2% from FQ4 2019 level ), as reported by a pure-play data-center REIT, Digital Realty ( DLR ), I can understand why WULF's ongoing pivot and growing partnership/funding have driven the outsized stock price ￰13￱ is especially since the recent agreement expansion with Fluidstack "anchors ~$3.7B in contracted revenues , with potential to reach $8.7B through lease extensions," with ~250 MW of additional gross IT load to be available from the end of 2026 ￰14￱ is apparent that WULF's vertically integrated HPC infrastructure offerings and the management team of veteran energy infrastructure entrepreneurs have worked out extremely well in driving accelerated buildout, deployment, and eventually top/bottom line recognition at a time when certain data center REITs are constrained by power ￰15￱ Conse nsus Forward Estimates Tikr Terminal These reasons may also be why the consensus has been raising their forward estimates, with WULF expected to report an accelerated top-line growth at a CAGR of +80.2% through FY 2027, while also reporting EBIT profitability in FY 2026 and positive adj EPS in FY ￰16￱ to the growing funding availability, I believe that the company is likely to remain well capitalized during the ongoing build out of its HPC infrastructure, with it presenting little risk to its cash ￰17￱ Valuations Seeking Alpha These reasons may also be why the market has re-rated WULF to FWD EV/Sales valuations of 28.94x and FWD EV/EBITDA valuations of 118.43x, with it apparent that the premium is attributed to the ongoing transition to a cloud provider, as similarly observed in the notable upgrading from the 3Y mean of 6.35x/0.50x, ￰18￱ the early days of its HPC prospects, based on the Enterprise Value of $5.93B by the time of writing, the consensus FY 2027 revenue estimates of $820.17M and ￰19￱ estimates of $448.46M, I am looking at a relatively attractive FY 2027 EV/Sales valuations of 7.23x and FY 2027 EV/EBITDA valuations of ￰20￱ compared to its HPC/neocloud/data center REIT peers, including: AMZN at FWD EV/Sales valuations of 3.35x and FWD EV/EBITDA valuations of 14.25x, GOOG at 7.12x/15.96x, MSFT at 11.82x/20.02x, ORCL at 13.97x/26.21x, CRWV at 16.41x/25.62x, NBIS at 55.50x/NA, CORZ at 14.74x/48.84x, DLR at NA/29.66x, and Equinix ( EQIX ) at NA/x, respectively, it goes without saying that WULF's nascent HPC prospects remain attractively valued ￰21￱ the other hand, readers may want to note the risks arising from its tenant concentration, since a bursting AI bubble may trigger lease reduction and/or cancellations, with it underscoring why investors may want to observe for further diversification in the company's tenant base beyond Fluidstack (at a current capacity of 260 MW) and Core42 (at a current capacity of 72.5MW) for an improved margin of safety.

So, Is WULF Stock A Buy , Sell, or Hold? WULF 15Y Stock Price TradingView For now, WULF has already notably broken out of numerous resistance levels to retest the $13s ranges by the time of writing, with it presenting a notable +555.8% rally since the 52 weeks bottom. WULF's Overbought Levels TradingView The overly fast/furious rally may also be why WULF appears to be overbought at current levels, as observed in the inflated RSI and nearly peaking trading volumes by the time of writing, worsened by the drastically higher short interest volumes by +149.4% on a YoY basis and the elevated ratio at 41.7%. Combined with the ongoing insider selling at current inflated levels and the overly done AI exuberance, I believe that a double digits correction may be in the books in the near term, with traders likely to take profits at current inflated ￰22￱ it remaining to be seen how the upcoming Q3 2025 earning season may develop, as the tariff risks kick in, it may be more prudent to wait for much of the exuberance to be ￰23￱ a result of its highly promising, nascent HPC transition, my initial Buy rating for the WULF stock comes with the caveat that investors observe the stock price movement for a little longer and only add after a moderate retracement to the 50/100-day moving averages for a lower dollar cost ￰24￱ the potential -29.5% downside from current levels, some patience may be more prudent for a lower dollar cost average and improved long-term return prospects.