Morgan Stanley cut its TeraWulf (NASDAQ: WULF) price target to $62.50 from $72 on Thursday while maintaining an Overweight rating. The new target still implies 273.1% upside from the note's $17.19 reference price on August 12. Byrd attributed the reduction primarily to TeraWulf's higher fully diluted share count rather than weaker execution.
Morgan Stanley now uses 624.8 million fully diluted shares, up by roughly 65 million quarter over quarter. The increase reflects warrant exercises, convertible-note conversions and a higher allocation of omnibus shares. TeraWulf's share price remained above $20 during June, causing more warrants and convertible instruments to enter Morgan Stanley's dilution calculation.
Stay ahead of AI infrastructure deals. Get Blockspace in your inbox. Morgan Stanley assigned $39.5 billion of total value to TeraWulf's HPC operations.
That includes $12.9 billion for signed leases and $24 billion for 2,082 MW of other owned sites. Future data-center additions contribute another $2.6 billion. The base case assumes TeraWulf achieves 50% of the lower end of management's target to add 250 MW annually from 2028 through 2032.
For the other owned sites, Morgan Stanley assumes annual revenue of $2.10 per watt, an 83% operating margin, 74% loan-to-cost and construction costs of $11 per watt. Those inputs produce a 15.8% NOI yield on capex and about $11.55 of NAV per watt. After corporate adjustments and $530 million of expected proceeds from the Abernathy sale, Morgan Stanley calculates $39 billion of equity value.
Dividing that figure by 624.8 million fully diluted shares produces the $62.50 target. The higher valuation for TeraWulf's HPC platform was offset at the per-share level by the larger share count. TeraWulf signed a 20-year lease with Anthropic in July covering approximately 401 MW of critical IT load at the Justified Data Campus in Kentucky.
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