The Bitcoin mining sector stands at a crossroads as operators pivot toward AI infrastructure to diversify revenue streams. TeraWulf (WULF Quick QuoteWULF - Free Report) and CleanSpark (CLSK Quick QuoteCLSK - Free Report) exemplify this transformation, each pursuing ambitious AI data center strategies alongside traditional mining operations. With Bitcoin prices fluctuating and network difficulty intensifying, both miners face critical decisions about capital allocation and operational efficiency.

Both companies announced significant developments in November 2025 that merit investor attention. TeraWulf recently announced the mandatory conversion of its preferred stock while navigating challenges from escalating costs and margin compression. CleanSpark reported transformative fiscal year results and completed a massive convertible debt offering to fund expansion. 

Let's delve deeper and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for WULF

TeraWulf's aggressive transformation into AI infrastructure presents both promise and peril for investors. The company's third-quarter results revealed troubling financial deterioration despite revenue growth. While revenues surged to $50.6 million, the massive GAAP net loss ballooned to $455 million, driven primarily by non-cash warrant and derivative revaluations. This accounting headwind masks deeper operational concerns about the sustainability of the company's aggressive expansion strategy.

The company's capital structure raises red flags. TeraWulf carries nearly $1.5 billion in total debt against just $712.8 million in cash as of September 2025, creating a negative net cash of $374 million. The debt-to-equity ratio stands at an alarming 4.39, significantly higher than industry peers. Recent mandatory conversion of preferred stock into common shares eliminates dividend obligations but adds substantial dilution risk, with each preferred share converting into 141.9483 common shares in December 2025.

Operationally, TeraWulf struggles with cost efficiency. The company's power cost guidance hovers around $0.035 per kilowatt-hour, less competitive than industry leaders. Mining capacity expanded modestly to 12.8 exahash per second, but production declined year over year due to strategic asset sales and halving effects.

The AI pivot through partnerships with Google-backed Fluidstack sounds impressive on paper, with contracts potentially reaching $9.5 billion over 25 years for the Abernathy campus. However, these arrangements require enormous upfront capital investments, with TeraWulf completing over $5 billion in long-term financings that dramatically increase leverage. Management targets 200-250 megawatts of HPC capacity operational by year-end 2026, but execution risks loom large given the company's track record of cash burn and negative free cash flow of approximately $35 million in the third quarter of 2025.

The Case for CLSK

CleanSpark emerges as the more fundamentally sound investment, demonstrating operational excellence and strategic discipline. The company's fiscal 2025 performance showcased remarkable financial achievement with record revenues of $766 million, representing 102% year-over-year growth. More impressively, CleanSpark generated positive net income of $364.5 million with earnings per share of $1.25, a stark contrast to peers posting persistent losses.

Its mining operations reflect industry-leading efficiency. CleanSpark achieved an operational hashrate of more than 50 exahash per second, with fleet efficiency reaching 17.7 joules per terahash. The company produced nearly 8,000 Bitcoin during fiscal 2025, holding over 13,000 Bitcoin valued at approximately $1.2 billion in treasury. Unlike its competitors, which burned cash, CleanSpark generated adjusted EBITDA of more than $823 million, demonstrating sustainable profitability even through Bitcoin's halving event.

The November 2025 strategic financing demonstrates capital market sophistication. CleanSpark completed an upsized $1.15 billion zero-coupon convertible note offering with a 27.5% conversion premium and a 6.25-year term. The proceeds funded a $460 million share buyback, reducing outstanding shares by nearly 11%. The company simultaneously paid down Bitcoin-backed credit lines, strengthening the balance sheet with approximately $1 billion in working capital.

CleanSpark's AI infrastructure strategy appears more pragmatic and achievable. The company secured 285 megawatts in Texas with long-term power agreements for exclusive AI development on 271 acres, potentially unlocking $3.8 billion in shareholder value by 2027. The partnership with Submer for modular immersion-cooled data centers positions CleanSpark to convert existing Bitcoin mining sites like the 250-megawatt Sandersville facility into AI colocation quickly. Management indicated multiple hyperscaler customers seeking 2026 deployments, with concrete discussions suggesting revenue generation sooner than competitors.

Its guidance inspires confidence. Management expects deployment of 19,000 S21 XP immersion units with industry-leading 13.5 joules per terahash efficiency to be completed by the first quarter of 2026, further improving the cost structure.

Valuation and Price Performance Comparison

Both stocks are trading at premium valuations relative to broader market averages, reflecting growth expectations in Bitcoin mining and AI infrastructure. However, CleanSpark presents substantially better value metrics. CLSK trades at a forward P/S near 3.96x, indicating a reasonable valuation for a profitable growth company. In contrast, WULF remains unprofitable with negative earnings. It is trading at an elevated P/S multiple, in excess of 17.8, compared to CLSK's more modest ratio.

WULF vs. CLSK: P/S F12M Ratio

Image Source: Zacks Investment Research

Price performance divergence reflects underlying fundamental quality. While WULF has surged over 162.2% year to date on AI partnership announcements, the stock exhibits extreme volatility with a beta exceeding 4.0. It suffered sharp pullbacks during Bitcoin price declines. CLSK demonstrated more stable appreciation despite short-term weakness from convertible note dilution concerns.

WULF Outperforms CLSK Year-to-Date

Image Source: Zacks Investment Research

Conclusion

CleanSpark holds decisive advantages over TeraWulf across critical investment dimensions. CLSK demonstrates proven profitability with positive net income and robust cash generation, contrasting sharply with WULF's persistent losses and negative free cash flow. Superior mining efficiency, larger Bitcoin treasury holdings and more pragmatic AI infrastructure deployment plans position CleanSpark to capitalize on both Bitcoin appreciation and emerging HPC demand. 

With better valuation metrics and clear pathways to sustained profitability, CleanSpark holds superior upside potential for the long term. Investors should track CLSK stock closely for attractive entry points while staying away from WULF until the company demonstrates meaningful progress by reducing costs, improving margins, and converting ambitious contracts into actual cash flow. 

CLSK currently carries a Zacks Rank #3 (Hold), whereas WULF has a Zacks Rank #4 (Sell). 

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