Summary
Citi has begun coverage of TeraWulf with a Buy/High-Risk recommendation and a $36 price target. The brokerage frames its initiation around long-term demand growth for high-performance computing (HPC) and artificial intelligence infrastructure, and notes industry constraints that may favor companies able to repurpose existing industrial sites with grid power into hyperscale AI data centers.
Market outlook and demand assumptions
Citi forecasts annual data center demand of 14.5 gigawatts (GW) in 2026, increasing to an average of 20 GW per year from 2027 through 2030, with most of that development expected in the United States. The bank links that demand trajectory to accelerating enterprise adoption of agentic AI workloads, which it expects will drive robust need for HPC compute capacity.
TeraWulf's positioning and strategy
The brokerage says TeraWulf is well positioned to address supply bottlenecks created by limitations in power transmission and growing local opposition to new data center developments. Citi highlights the company's strategy of redeveloping industrial sites that already have grid power allocations into hyperscale facilities tailored for AI workloads.
Citi also emphasizes TeraWulf's approach to capital deployment - committing the bulk of development capital only after securing tenant leases - as a way to reduce execution risk compared with speculative development models.
Current projects and capacity ambitions
At present, TeraWulf is building a 378 MW facility for FluidStack, which is backed by Google, at its Lake Mariner campus near Buffalo, New York. The company is additionally pursuing energy commitments in New York, Kentucky and Maryland that Citi says could support more than 3 GW of future capacity.
Citi notes that TeraWulf's target of developing 250-500 megawatts (MW) of capacity annually would be a relatively small portion of the broader market opportunity implied by the bank's demand forecasts.
Valuation view and cautions
Although TeraWulf shares have already recorded strong gains this year, Citi contends that the current valuation does not fully capture the company's multi-year growth potential. The bank also outlines several key risks, including project execution, potential pricing pressure if industry supply constraints ease, redevelopment and leasing risks, and the need to secure funding to support the planned pace of expansion.
Outlook
Citi's initiation frames TeraWulf as a player that could benefit from elevated HPC demand and constrained supply dynamics, while making clear that realization of that opportunity depends on successful project delivery, favorable leasing outcomes and financing availability.