Shares of AI infrastructure developer TeraWulf WULF jumped more than 17% in premarket trading on Monday after Anthropic signed a 20-year lease for a large-scale data center in Kentucky.
The agreement is expected to generate approximately $19 billion in revenue over its initial term and further strengthens TeraWulf’s position as one of several former Bitcoin miners capitalizing on booming demand for AI computing capacity.
Under the agreement announced Monday, Anthropic will lease a data center located about an hour southwest of Louisville, Kentucky.
The facility is expected to provide roughly 400 megawatts of capacity, with first power delivery scheduled for the second half of 2027.
The campus will ramp to the full 401 MW by early 2028.
The deal represents one of the largest long-term AI infrastructure commitments announced this year and is expected to generate about $19 billion in revenue over the lease period.
Separately, TeraWulf said it had entered into a definitive agreement to sell its 50.1% ownership interest in the Abernathy Joint Venture to an investor group led by its joint venture partner, Fluidstack.
The company said the transaction monetizes its approximately $450 million investment at a premium to invested capital, freeing up additional funds for expansion of wholly owned AI infrastructure projects.
AI pivot gains momentum
TeraWulf has increasingly shifted its focus away from cryptocurrency mining as falling Bitcoin mining economics have encouraged miners to repurpose their power infrastructure for artificial intelligence and high-performance computing workloads.
The company’s shares have climbed more than 66% this year and over 340% during the past 12 months as investors have embraced that strategy.
Signs that the transition is beginning to pay off emerged in the company’s first-quarter earnings released in May.
High-performance computing leases generated $21 million in revenue during the quarter, comfortably ahead of Wall Street estimates of $18.6 million.
A year earlier, the company generated no AI lease revenue.
Overall quarterly revenue, however, edged lower to $34 million from $34.4 million a year ago, while TeraWulf reported a wider-than-expected loss of $1.01 per share, compared with a loss of 16 cents a year earlier.
Analysts had expected a loss of about 20 cents.
Analysts see further upside
Despite the earnings miss, encouraging numbers related to its HPC lease revenue have prompted several Wall Street firms to initiate bullish coverage in recent weeks.
Citi recently launched coverage with a Buy rating and a $36 price target, implying roughly 39% upside from Friday’s closing price.
According to CNBC, Citi analyst Michael Rollins believes TeraWulf remains well-positioned as demand for high-performance computing continues to outstrip available infrastructure.
“The challenge is that supply constraints for large-scale deployments are not immediately abating, as power transmission remains restrained in key metro markets and community resistance to data centers (aka NIMBY-ism) has picked up. TeraWulf is one of several companies that are addressing the potential bottleneck,” Rollins said.
Citi noted that while AI deployments remain in the early stages, TeraWulf is building a framework capable of developing between 250 MW and 500 MW of new data center capacity annually by converting industrial sites with existing grid access into hyperscale AI facilities.
Rollins acknowledged execution and funding risks, including the challenge of completing large projects on tight timelines, but argued that “the valuation still doesn’t reflect WULF’s multi-year growth opportunities.”
Other analysts have also turned positive on the stock.
BofA Securities initiated coverage last month with a Buy rating and a $34 price target, arguing that the company’s move from traditional Bitcoin mining into AI infrastructure positions it to benefit from accelerating demand for high-performance computing.
According to Investing.com, BofA analyst Michael Funk said the company is well placed within the rapidly expanding AI infrastructure market and highlighted upcoming catalysts including completion of the Lake Mariner project later this year and the expected announcement of a customer for the Kentucky campus.
Bernstein previously began coverage with an Outperform rating and a $46 price target, citing the company’s growing project pipeline and capital-light leasing model, while Citizens has reiterated a Market Outperform rating with a $32 target.
TeraWulf has also continued to strengthen its balance sheet to support its AI ambitions.
The company recently completed a $3.2 billion high-yield bond sale to finance expansion of its Lake Mariner campus in New York.
The financing is backed by Google as guarantor once the facility becomes operational, adding credibility to TeraWulf’s infrastructure platform.
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