Why TeraWulf’s AI and Crypto Expansion Could Make It the Next Big Stock

TeraWulf ($WULF) has been on my radar lately, and for good reason. They’re not your typical Bitcoin mining company. Instead of sticking to traditional methods, they’re using 100% zero-carbon energy to mine Bitcoin. That’s a big deal in an industry constantly criticized for its environmental impact. On top of that, they’re expanding into AI and high-performance computing (HPC). Honestly, it feels like they’re setting themselves up for something much bigger. Let’s take a closer look.

What Does TeraWulf Do?

TeraWulf is primarily a Bitcoin mining company, but they’re doing it differently. By focusing on clean energy, they’ve positioned themselves as a sustainability leader in the crypto space. They’re mining Bitcoin while reducing their carbon footprint, which gives them a unique edge.

But here’s what’s really interesting—they’re not stopping at crypto mining. They’re expanding their Lake Mariner facility to include AI and HPC infrastructure. This diversification could open up entirely new revenue streams, which is something not all crypto mining companies are doing.

For readers interested in companies branching out into AI, check out Dell’s Big Bet on AI: Will It Deliver a Q3 Earnings Surprise?.

How Did TeraWulf Perform Last Quarter?

Their Q3 2024 earnings were, let’s just say, a mixed bag.

• Revenue: $27 million, which was 15% below expectations.
• Earnings Per Share (EPS): -$0.06 vs. an expected -$0.03.

At first glance, those numbers don’t look great. But it’s important to remember they’re in a heavy investment phase, pouring money into expansions like Lake Mariner. When a company is investing heavily in its future, short-term numbers often take a hit. To me, this isn’t a reason to write them off.

If you’re new to investing and want to start building your portfolio, check out How to Invest Your First $1,000 on Robinhood: A Beginner’s Guide (2024 Edition).

What Are Analysts Saying About TeraWulf?

This is where it gets interesting. Even with the earnings miss, analysts are still backing the stock. Northland Capital recently raised their price target to $10, which is a nice jump from the current ~$6.99. And overall, most analysts are calling it a Strong Buy.

If you’re curious how analysts’ expectations shape a stock’s potential, you might enjoy reading Will Semtech ($SMTC) Beat Q4 Earnings Expectations? Key Metrics and Analysis.

Is TeraWulf Expanding Beyond Crypto?

Yes, and this is one of the things I love most about them. TeraWulf’s expansion into AI and HPC shows they’re thinking beyond just Bitcoin mining. The Lake Mariner facility is being upgraded to handle these new capabilities, which could bring in additional revenue streams. AI and HPC are growing fields, and by entering these spaces, TeraWulf is diversifying in a really smart way.

What Risks Should Investors Know About?

No stock is without risks, and TeraWulf has a few to keep in mind:

• Earnings Miss: Falling short of revenue and EPS targets last quarter isn’t ideal.
• Rising Costs: The cost per Bitcoin mined jumped to $30,448 in Q3, up from $22,954 in Q2.
• High Short Interest: About 19% of the stock’s float is shorted, which means some investors are betting on a price drop.

If you’re into risk analysis and the bigger picture, take a look at Is SMCI Getting Delisted? Or Is SMCI Stock a Good Buy?.

How Does TeraWulf Compare to Competitors?

The crypto mining sector is heating up, especially with Bitcoin nearing $90,000. Here’s how TeraWulf stacks up against a couple of its peers:

• Marathon Digital (MARA): Reported $131.6 million in revenue last quarter but had a massive net loss of $124.8 million.
• Hut 8 Mining: Revenue doubled to $43.74 million and is also expanding into AI tech.

TeraWulf may not have the same revenue numbers yet, but their focus on sustainability and new tech gives them a unique edge.

Why Bitcoin’s Price Matters for TeraWulf

Like most crypto mining companies, TeraWulf’s performance is closely tied to Bitcoin prices. With Bitcoin nearing its all-time high, this could be a huge tailwind for the company. That said, this reliance on Bitcoin is a double-edged sword. If prices drop, it could impact their earnings. This is why their move into AI and HPC is so important—it helps hedge against the volatility of crypto markets.

Final Thoughts: Is TeraWulf a Buy?

TeraWulf isn’t perfect. They’ve had some short-term struggles with earnings and rising costs, and the high short interest suggests not everyone’s convinced. But for me, the positives far outweigh the negatives.

They’re leading the way in sustainable crypto mining, expanding into high-growth areas like AI and HPC, and analysts are still backing them with strong ratings. Combine that with Bitcoin’s current uptrend, and it feels like this stock has serious potential.

If you’re curious about how other companies are navigating earnings season, check out Palo Alto Networks Q1 Earnings: Will It Beat Expectations Amid Strong Cybersecurity Demand?.

If you’re okay with a little risk and believe in the future of Bitcoin and sustainable mining, TeraWulf might be worth considering. I know I’ll be watching them closely.

Original Tweet 👉