Key Takeaways
- TeraWulf stock is down 20% in the past month as fears over how AI-hosting companies will fund their buildouts hit the whole group, CoreWeave above all.
- TeraWulf’s own news was good: it doubled the power under contract at its Muskie campus in Kentucky to 1 GW and moved the second phase up a year, to 2029.
- KBW cut its target to $20 from $29 and kept its Outperform rating. It was one of four firms that cut their targets this month and kept a positive rating.
- I’d wait for the Nov. 6 third-quarter report to show who signs for Muskie and how TeraWulf pays to build it.
TeraWulf (WULF) stock is down 20% in the past month, and little of that came from its own news. The whole AI-hosting group sold off on worries over how it funds its buildouts, CoreWeave (CRWV) above all.
KBW cut its target to $20 from $29 on Nov. 2 and kept its Outperform rating. That target is still 83% above Monday’s close.
The good news came first
On Oct. 5, TeraWulf doubled the power under contract at its Muskie campus in Kentucky to 1 GW. It also moved the second 500 MW phase up to 2029, pending approval from Kentucky regulators. CEO Paul Prager: “Customer interest in Muskie has been tremendous, and power availability is central to those conversations.” A week later, TD Cowen initiated coverage with a Buy and a $21 target.
Wall Street’s growth estimates rest on that power. Analysts expect revenue to climb from $168 million in 2025 to $1.76 billion in 2028:
Nothing this month should cut those estimates. The bad news was about the group’s financing, and TeraWulf’s own news was a bigger campus.
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Then the money question hit everyone
On Oct. 22, CoreWeave’s bond yields spiked, Nebius took a $3.5 billion secured bridge loan from Citi, and Bernstein cut its CoreWeave target to $51, warning of an $85 billion funding gap. CoreWeave is down 41% over the past month. Investors started asking who pays for everyone else’s data centers, TeraWulf’s included.
Four days later, Elon Musk warned that neoclouds could face consolidation and failures. IREN fell 42% over the month and Cipher Digital fell 49%, while the Nasdaq 100 dropped 9%.
On Oct. 23, TeraWulf raised the commitments on its revolving credit facility to about $400 million from $250 million, according to an 8-K filed that evening. That’s useful, but a gigawatt campus will take much bigger financing, and a customer to back it.
The same evening, short seller Jim Chanos went after TeraWulf’s stock-based pay in a reply to Prager on X: “Your 2026 share-based comp has been running at 2x your 2Q annualized revenue.” Every share TeraWulf hands out, or sells to fund a campus, shrinks what existing holders own.
Analysts cut their targets and kept their ratings
Cantor Fitzgerald cut its target to $30 from $37, ATB Cormark to $40 from $45, and B. Riley to $26 from $40. All three kept positive ratings. On Oct. 15, Morgan Stanley analyst Stephen Byrd called the decline “at odds with underlying contract value and likely value creation from upcoming contracts.” His $65 target is the Street’s highest, and the lowest is $15.
The selloff has taken TeraWulf down to about 11x forward sales. That’s a bit under its three-year average of 12x and far below the 39x it hit in May:
The consensus target has come down from $39 in July to $31, and it’s still nearly triple Monday’s close:
Wait for a Muskie customer
TeraWulf reports third-quarter results before its 8 a.m. call on Nov. 6. I want three things from it: a customer for Muskie, the Kentucky approval, and a plan to pay for the buildout without leaning harder on shareholders.
At about 11x forward sales, TeraWulf isn’t priced for disaster. But the Street’s targets rest on revenue growing more than tenfold by 2028. That only happens if customers sign and lenders fund the campuses. Until TeraWulf shows both, I’d hold off, even with KBW’s lower target well above the price.
Of course, this stock has traded on the whole group’s financing mood all month. Good news at CoreWeave could lift it as fast as bad news sank it.
So what is TeraWulf stock actually worth?
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Disclaimer:
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