Shares of TeraWulf experienced a significant rally in Friday's trading session, climbing 11.5% to $15.93. This sharp increase followed Morgan Stanley's decision to initiate research coverage on the company with a bullish Overweight rating and a price target of $37.
The financial institution's positive assessment centers on TeraWulf's strategic pivot toward data center hosting services, a move seen as diversifying its revenue streams beyond cryptocurrency mining. Analysts pointed to the company's established track record in securing customer agreements and its expertise in power infrastructure as key strengths.
This development arrives against a backdrop of weakness in the broader crypto market, with Bitcoin declining 2.4% to approximately $69,351. The contrasting performance underscores a growing investor focus on miners' ability to leverage their power assets for more stable data center income, particularly to support burgeoning artificial intelligence workloads.
Other mining stocks showed mixed reactions. Cipher Mining advanced 9.5%, while Marathon Digital retreated 0.6%. Riot Platforms saw minimal movement, edging up just 0.2%.
The shift toward high-performance computing represents a fundamental change for the industry, aiming to reduce reliance on the volatile cryptocurrency markets. However, this transition requires substantial upfront capital investment and faces execution risks, including construction delays, equipment procurement, and evolving customer demand.
Investor attention now turns to TeraWulf's upcoming fourth-quarter earnings report, scheduled for February 26. The market will scrutinize management commentary on contracted capacity, customer negotiations, and the timeline for converting mining infrastructure to data center use.
