TD Cowen initiated coverage of TeraWulf with a Buy rating and a $21 price target, implying approximately 52.5% upside from the previous day's closing price. The firm said investors are undervaluing the company's expansion into AI data centers.
Analyst Michael Elias said the 9% capitalization rate investors apply to TeraWulf's data center leases is too high. The Bitcoin miner is converting facilities to serve the high-demand AI data center market.
TD Cowen's bullish view also reflects Google's warrants, which represent an estimated 8% stake in TeraWulf.