TeraWulf (WULF Quick QuoteWULF - Free Report) shares are currently overvalued, as suggested by the Value Score of F. In terms of price/book, TeraWulf is trading at 31.18X compared with the Zacks Financial- Miscellaneous Services industry’s and the Zacks Finance sector’s 3.55X and 4.24X, respectively. TeraWulf shares are also trading at a premium compared with peers, including Riot Platforms (RIOT Quick QuoteRIOT - Free Report) and Cleanspark (CLSK Quick QuoteCLSK - Free Report) . RIOT and CLSH shares are trading at a P/B multiple of 2.13 and 2.21, respectively.

WULF’s Valuation is Stretched

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Year to date (YTD), TeraWulf shares have appreciated 122.9%, outperforming the industry and the sector’s return of 3.2% and 12.8%, respectively. TeraWulf has also outperformed Riot Platforms and Cleanspark, shares of which have returned 86% and 83.1%, respectively, YTD.

WULF Shares Outperform Industry, Sector & Peers

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So, how should investors play WULF stock now? Let’s analyze.

WULF’s Top Line to Benefit From Growing Clientele

WULF self-mined 485 bitcoin at the Lake Mariner facility in the second quarter of 2025, and bitcoin mining capacity jumped 45.5% year over year to 12.8 EH/s. As of June 30, 2025, TeraWulf owned approximately 70,300 miners, with approximately 65,100 operational at the facility. The company is on track to deliver 72.5 MW of HPC colocation capacity under its data center lease agreements with Core42 Holding for GPU compute workloads. The WULF Den and CB-1 leases with Core42 are expected to start generating revenues in the third quarter of 2025.

WULF inked a deal with Fluidstack, a premier AI cloud platform that builds and operates HPC clusters. TeraWulf will deliver more than 360 MW of critical IT load at its Lake Mariner data center campus in Western New York. The Lake Mariner facility can expand up to 500 MW in the near term and up to 750 MW with targeted transmission upgrades. At the end of the second quarter of 2025, the facility had 245 MW of energized capacity supporting bitcoin mining infrastructure. 

The deal represents roughly $6.7 billion in contracted revenues, with total contract revenues expected to hit $16 billion. As per the deal, Alphabet’s (GOOGL Quick QuoteGOOGL - Free Report) Google is backing Fluidstack’s lease obligations, which include early termination protections for the first six years. Alphabet is also providing $3.2 billion of credit support, and its total pro forma equity ownership in TeraWulf increases to approximately 14%.

WULF also secured a long-term ground lease for approximately 183 acres at the Cayuga site in Lansing, NY. The lease provides TeraWulf with exclusive rights to develop up to 400 MW of digital infrastructure capacity, with 138 MW of low-cost, predominantly zero-carbon power expected to be ready for service in 2026.

Stiff Competition, Macroeconomic Challenges Hurt WULF

WULF faces significant competition from Riot Platforms and Cleanspark. As of Sept. 30, Riot Platforms and CleanSpark held 19,287 and 13,011 bitcoins, respectively.

Similar to TeraWulf, Riot Platforms is a vertically-integrated bitcoin mining company offering comprehensive and critical infrastructure to mine bitcoin. The company has been exploring the feasibility of developing a portion of RIOT’s power capacity for AI and HPC uses. CleanSpark produced 2,012 bitcoins, a 28% increase year over year in the third quarter of fiscal 2025. 

Apart from stiff competition, TeraWulf is suffering from volatility in bitcoin price that can be attributed to a challenging macroeconomic environment, tariff headwinds and uncertainty over the U.S. government shutdown.

Moreover, WULF expects 2025 selling, general and administrative expenses between $50 million and $55 million compared with previous guidance of $40-$45 million due to accelerated growth in the company’s HPC business.

Image Source: TeraWulf

Earnings Estimates Revision Trend Worsens for WULF

For third-quarter 2025, the Zacks Consensus Estimate for WULF’s loss has widened by 3 cents to 7 cents per share over the past 30 days. The company reported a loss of 5 cents in the year-ago quarter. The consensus mark for third-quarter 2025 revenues is currently pegged at $55.4 million, indicating 104.6% growth from the figure reported in the year-ago quarter.

The Zacks Consensus Estimate for fourth-quarter 2025 loss is pegged at 5 cents per share, which has widened by a couple of cents over the past 30 days. The company reported a loss of 8 cents in the year-ago quarter. The consensus mark for fourth-quarter 2025 revenues is currently pegged at $66.7 million, indicating 90.8% growth from the figure reported in the year-ago quarter.
 

For 2025, the Zacks Consensus Estimate for TeraWulf’s loss has widened by 6 cents to 33 cents per share over the past 30 days. The company reported a loss of 19 cents per share in 2024. The consensus mark for 2025 revenues is currently pegged at $204.1 million, indicating 45.7% growth from the figure reported in 2024.

Here is Why Investors Should Avoid WULF

WULF’s prospects improve from a lease deal with Fluidstack and the beginning of revenue generation from the WULF Den and CB-1 leases with Core42. Alphabet’s investment also bodes well for the TeraWulf stock. However, TeraWulf suffers from a stretched valuation and uncertainty about the U.S. government shutdown that increases volatility in bitcoin trading. Increasing losses make the WULF stock risky for investors.

TeraWulf currently has a Zacks Rank #4 (Sell), which implies that investors should avoid the stock right now. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.