TeraWulf (WULF) Soars 7.94% on Landmark Google Backstop and AI Compute Deal

TeraWulf (WULF) surged 2.94% on Thursday, marking its third consecutive day of gains, with the stock climbing 4.38% over the past three days. The share price reached its highest level since October 2025, buoyed by an intraday rally of 7.94%, reflecting renewed investor confidence in the company’s strategic direction and institutional partnerships.

The recent momentum is driven by TeraWulf’s landmark $3.2 billion backstop agreement with Google, which secures a 14% equity stake in the company. This partnership, announced on September 27, 2025, includes a $3.7 billion, 10-year AI compute deal with FluidStack, enabling TeraWulf to leverage its New York data center for AI and high-performance computing (HPC) services. The collaboration not only validates TeraWulf’s infrastructure but also enhances its credit profile, potentially lowering future capital costs. Analysts highlight that such institutional backing could improve the company’s debt rating, further supporting its growth trajectory.

Complementing the partnership, TeraWulf announced a $3 billion debt financing initiative to accelerate development of its Lake Mariner campus, a key hub for AI and HPC. The funding, arranged by Morgan Stanley and backed by Google, aligns with broader trends in AI infrastructure, where companies like CoreWeave have similarly raised capital to expand capacity. While the debt-to-equity ratio of 3.03 raises leverage concerns, TeraWulf’s $90 million in cash and Bitcoin reserves provide liquidity buffers, mitigating short-term risks.

Financial performance in Q2 2025 underscored TeraWulf’s ability to capitalize on market demand, with revenue rising 34% year-over-year to $47.6 million. The earnings report highlighted robust cash reserves and efficient cost management, with a 43.8% gross margin. However, the company’s focus on long-term infrastructure expansion over near-term profitability remains a key consideration for investors. Analysts note that TeraWulf’s valuation premium, reflected in a 32.8x price-to-sales ratio, hinges on the successful execution of its AI and HPC strategies.

Despite institutional optimism, competitive pressures persist. Rivals such as Cipher Mining have secured similar Google-backed deals, intensifying the race to dominate AI infrastructure. TeraWulf’s differentiation through its Lake Mariner campus and strategic alliances will be critical to maintaining its market position. Meanwhile, shifts in ownership stakes, including Google’s 14% equity stake, signal strong institutional confidence, though retail investors remain cautious given the stock’s volatility.

Analysts remain divided on TeraWulf’s fair value, with a consensus estimate of $12.86 per share implying an 11% upside from its October 3 closing price. This projection depends on achieving profitability through revenue growth and margin expansion. Risks such as execution delays or a slowdown in AI demand could temper expectations, but the company’s dual focus on crypto mining and AI infrastructure positions it to benefit from both sectors. For now, TeraWulf’s stock remains a focal point in the evolving AI-driven infrastructure landscape.