TeraWulf Inc. (NASDAQ: WULF) saw its shares climb 12.8% to close at $22.83 on Wednesday, with after-hours trading pushing the stock to $23.22, following the announcement of a landmark lease agreement with artificial intelligence firm Anthropic. The deal, valued at approximately $19 billion over 20 years, covers a purpose-built data center campus in Hawesville, Kentucky, and marks a significant pivot for the company away from its bitcoin mining roots toward high-performance computing (HPC) infrastructure for AI workloads.
The agreement grants Anthropic access to roughly 401 megawatts of critical IT load—power reserved for servers and related equipment—with delivery anticipated between late 2027 and early 2028. TeraWulf Chairman and CEO Paul Prager emphasized that the lease validates the company's strategic shift, stating in a press release that it establishes a long-term, recurring revenue stream with a tier-one AI customer. He also highlighted power availability as a key bottleneck, noting that megawatts cannot be created overnight.
Wall Street analysts responded swiftly to the news, raising their price targets on TeraWulf stock. Morgan Stanley increased its target to $72 from $66.50, Needham lifted its target to $33 from $28, Compass Point raised its target to $40 from $28, Bernstein maintained an Outperform rating with a $36 target, and Rosenblatt increased its target to $30 from $27. Needham analyst John Todaro described the contract as one of the most attractive leases in the sector, while Rosenblatt characterized it as a significant positive for TeraWulf's brownfield development strategy, which involves repurposing existing industrial sites for data center use rather than building on undeveloped land.
The broader market for power-intensive digital infrastructure also benefited from the news. Shares of IREN advanced approximately 8.0%, and Cipher Digital rose about 6.6%. In contrast, the Nasdaq Composite edged up 0.2%, the S&P 500 slipped 0.28%, and the Dow Jones Industrial Average dropped 1.09%, reflecting a mixed session for U.S. equities.
In addition to the Anthropic lease, TeraWulf moved to streamline its asset base by agreeing to sell its stake in the Abernathy joint venture to a buyer group led by Fluidstack. According to a Securities and Exchange Commission filing, the transaction involves aggregate consideration of approximately $530 million, payable in three installments. This divestiture aligns with the company's focus on its core AI data center business and reduces exposure to legacy ventures.
Despite the positive sentiment, the new thesis for TeraWulf hinges on execution. Rent payments under the Anthropic lease commence only as the premises are delivered, and the company's SEC filing flagged risks including financing, permits, power availability and cost, as well as its ability to perform under data center leases. Any delays, budget overruns, or tighter credit conditions could erode the value investors are currently assigning to the contract.
For now, analysts remain firmly bullish. According to FactSet data cited by TradingView, the average 12-month price target has risen to $38.44 from $38.14, with a consensus Buy rating across 19 covering analysts and no Hold or Sell recommendations. The market appears to be betting that TeraWulf can successfully transition from a volatile crypto miner to a stable owner of contracted AI infrastructure, a narrative that could drive further upside if the company meets its delivery milestones.
