US-based data center company TeraWulf, specializing in bitcoin mining and artificial intelligence infrastructure, saw its share price tumble sharply after announcing a new $900 million capital raise on Wednesday. The company issued 47.4 million new shares, each priced at $19. This move triggered a 5.8% drop in WULF shares during early trading, settling at $19.73. An additional 7 million shares could be sold to investors under the “greenshoe” option.
Capital boost and investment strategy
With this new funding, TeraWulf has set its sights on building a large-scale data center campus in Hawesville, Kentucky. The company also aims to use the funds to pay off its short-term debts and fuel further growth projects. Like many firms investing in AI infrastructure in recent months, TeraWulf’s shares had climbed over 50% since the end of March.
The fresh capital is intended to drive expansion in both bitcoin mining and high-performance computing (HPC) operations. Beyond debt repayment, TeraWulf plans to expand its facilities gradually, in line with customer demand—a strategy designed to balance immediate financial health with long-term growth.
Preliminary results and financial outlook
According to preliminary figures released for the first quarter of 2026, the company projects revenue of between $30 million and $35 million. Its latest financial statement shows TeraWulf holding $3.1 billion in cash, but also carrying total debt of $5.8 billion.
Management highlighted significant shifts in company earnings, noting that revenues from contracted HPC hosting now exceed half the total income. This transformation is expected to stabilize TeraWulf’s cash flow and create a stronger, longer-term financial footing.
Analyst insights and sector trends
Compass Point analyst Michael Donovan assigned a $28 price target and a ‘Buy’ rating to WULF shares. Donovan pointed out that the pivot toward HPC-driven revenue represents a positive change, as it marks the first time hosting contracts have outpaced bitcoin mining revenues.
Donovan commented that the capital increase could launch a new growth phase with the Kentucky data center project, which he expects to be developed in stages based on customer demand. He also noted that there is continued strong demand for TeraWulf’s electricity and hosting capacity.
Looking ahead, the analyst expects the company’s revenue structure to shift meaningfully in favor of hosting services over the next two years. As a result, TeraWulf’s reliance on volatile bitcoin prices would decrease, paving the way for more predictable earnings. This shift also highlights a broader industry trend: rather than sticking solely to bitcoin mining, firms are increasingly targeting AI and high-performance computing.
