TeraWulf rated BUY for strong AI data center growth and high margins despite capital intensity.

TeraWulf (WULF) is rated a BUY due to its strong growth potential in AI data center infrastructure, supported by a capital-heavy model that enables efficient data centers with 1.36GW free capacity and a $19 billion, 20-year ANTHRO contract. Despite higher capital expenditures and net debt, TeraWulf's AI business achieves an 88% gross margin and a 48% operating margin, outperforming competitors like Core Scientific. Its valuation premium reflects scalable capacity, a diverse customer base, and higher expected revenue growth by fiscal year 2027 compared to peers. This positions TeraWulf as a promising investment in the AI data center sector.