Morgan Stanley has opened coverage on TeraWulf Inc. (NASDAQ: WULF) with an Overweight rating and set a $37.00 price objective, the firm said on Monday. At the time of the initiation the shares were trading at $14.29, a level that sits far beneath Morgan Stanley’s target while remaining higher than an InvestingPro Fair Value assessment, a contrast that the bank’s optimism does not erase.
Analyst rationale
The investment bank points to TeraWulf’s demonstrated ability to sign agreements with data center customers and to the management team’s deep experience in developing power infrastructure assets as the foundation for its positive view. Morgan Stanley’s initiation comes even though TeraWulf reported negative earnings of $1.44 per share over the last twelve months, underlining the company’s current unprofitability.
To value TeraWulf’s Bitcoin-to-data-center pipeline, Morgan Stanley applies what it calls a "REIT endgame" framework. Within that construct, the bank assigns an approximate present value of $8 per watt to sites that have not yet secured Bitcoin-to-DC contracts, reflecting its assessment of potential conversion value if those locations are monetized under the bank’s scenario.
Growth scenarios and assumptions
Morgan Stanley outlines several throughput scenarios tied to the company’s annual data center project expansion plans for 2028-2032. In the base case, the bank assumes management will achieve a 50% success rate in reaching the lower-bound construction target of 250 MW per year during that five-year period. In an upside, or bull case, Morgan Stanley assumes a 75% success rate and positions the company to hit the higher-end target of 500 MW per year from 2028 to 2032.
Recent corporate developments
Separately from the coverage initiation, TeraWulf has made multiple strategic moves. The company acquired two brownfield infrastructure sites located in Kentucky and Maryland, which collectively add roughly 1.5 gigawatts of capacity to its digital infrastructure holdings. That acquisition increases TeraWulf’s platform to about 2.8 GW across five sites, more than doubling the company’s capacity footprint.
TeraWulf also secured project-level financing for a 168 MW high-performance computing joint venture in Abernathy, Texas, intended to develop a liquid-cooled AI data center in partnership with Fluidstack. That project benefits from long-term credit enhancement provided by a global hyperscale partner, which Morgan Stanley notes improves the venture’s credit profile.
In addition, TeraWulf’s subsidiary Flash Compute LLC has priced a $1.3 billion senior notes offering carrying a 7.250% coupon and maturing in 2030. The offering is expected to close on December 29, 2025, subject to market and other customary conditions.
Market context
These corporate and financing steps arrive amid a broader sell-off in Bitcoin mining equities as cryptocurrency prices have declined, a dynamic that has pressured shares across the sector, including TeraWulf. Despite the market downturn, the company’s transactions point to an emphasis on expanding its infrastructure base and securing financing for future projects.
What remains uncertain
While Morgan Stanley’s models provide a path to value that depends on project conversions and execution against ambitious build targets, the ultimate realization of those scenarios hinges on conversion of sites without current contracts, the company’s ability to reach its targeted growth rates, and the successful execution and closing of financing arrangements.