TeraWulf Inc. (WULF): A Bull Case Theory

We came across a bullish thesis on TeraWulf Inc. on The Analyst's Journal’s Substack by A_Capital. In this article, we will summarize the bulls’ thesis on WULF. TeraWulf Inc.'s share was trading at $13.79 as of January 26th. WULF’s forward P/E was 29.76 according to Yahoo Finance.

TeraWulf Inc., together with its subsidiaries, operates as a digital asset technology company in the United States. WULF represents a highly speculative but potentially transformational opportunity at the intersection of AI infrastructure scarcity, power constraints, and the evolving digital asset economy. Formerly a pure-play bitcoin miner, the company has pivoted toward high-performance computing and AI data centre infrastructure, leveraging scarce, already-interconnected power assets to bypass the 5–10 year grid queues that constrain most competitors.

With $6.7 billion of contracted HPC revenue—potentially expanding to $16 billion through extensions—594 MW under long-term leases, and a $3.2 billion financial backstop alongside a 14% equity stake from Google, TeraWulf is positioned as one of the few platforms capable of delivering large-scale AI capacity in the critical 2026–2027 window. Q3 2025 marked an operational inflection, with the first meaningful HPC lease revenue, 84% year-over-year growth, and positive adjusted EBITDA validating the dual bitcoin/HPC strategy.

The upside case rests on flawless execution as the company scales from 22.5 MW of energized HPC capacity to nearly 600 MW within two years, driving a mix shift toward 70–85% margin HPC revenues and materially improving cash flow visibility. However, the risks are substantial.

TeraWulf faces extreme execution complexity, heavy customer concentration around Fluidstack and Google, disputed zero-carbon claims that could impair hyperscaler relationships, and aggressive leverage that virtually guarantees further dilution, with fully diluted shares potentially rising 30% by 2027. Valuation already reflects optimistic assumptions, leaving little room for delays or cost overruns, while near-term cash flows remain meaningfully exposed to bitcoin price volatility.

In sum, TeraWulf offers asymmetric upside tied to AI infrastructure scarcity, but with binary execution risk. The stock is best suited for high-risk growth portfolios willing to tolerate severe volatility, dilution, and drawdowns in exchange for the possibility of outsized long-term returns if the HPC transformation succeeds.

Previously, we covered a bullish thesis on IREN Limited (IREN) by Anxious-Criticism652 in May 2025, which highlighted the company’s transition from Bitcoin mining to AI infrastructure, leveraging renewable-powered data centers, zero debt, strong cash flow, and early AI partnerships to potentially achieve a 10x valuation. IREN’s stock price has appreciated by approximately 474.12% since our coverage. A_Capital shares a similar perspective but emphasizes TeraWulf’s scale, Google backing, and HPC revenue contracts.

TeraWulf Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held WULF at the end of the third quarter which was 26 in the previous quarter. While we acknowledge the risk and potential of WULF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WULF and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.