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.

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