TeraWulf Climbs Despite Q1 Stumble, Analyst Expects Mining, Data Center Gains

TeraWulf Inc WULF Friday reported weaker-than-expected first-quarter results.

The weakness may prove temporary, with mining results coming in stronger in the current quarter, according to Rosenblatt Securities. 

The TeraWulf Analyst: Analyst Chris Brendler reiterated a Buy rating, while reducing the price target from $4.50 to $4.00.

The TeraWulf Thesis: Given the crypto miner's pivot towards high-performance computing (HPC), revenue generation from this could commence in the second quarter, Brendler said in the note.

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The weaker first-quarter results "were largely due to much higher electricity costs," which took gross margins to 29%, from 44% in the previous quarter and well below estimates of 55%, he added.

"Fortunately, mgmt indicated this kind of cost increase is extremely unusual (‘once in a decade’) and electricity costs dropped back down to $0.05/kWh once the severe weather ended in 1Q25," the analyst wrote.

TeraWulf signed a hyperscaler customer and the approval to expand Lake Mariner by another 250 megawatts is expected in the current quarter, he stated.

WULF Price Action: Shares of TeraWulf had risen by 17.2% to $3.54 at the time of publication on Monday.

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