Summary TeraWulf (WULF) and Cipher Mining (CIFR) are top crypto miners pivoting to AI and HPC workloads, securing major hyperscaler deals. Both TeraWulf and Cipher have landed multi-billion dollar contracts with Alphabet's Google Cloud and Amazon's AWS, driving projected revenue growth of 132% and 66% in 2026, respectively. Valuation multiples for both companies could expand to 21-22x 2026 revenues, implying 45-50% share price upside from current levels. Risks include TeraWulf’s higher leverage and the critical need for both companies to deliver on large-scale infrastructure commitments by 2026. Investment Thesis Next year is going to be a make-or-break year for crypto miners. The stagnation in Bitcoin’s price so far has cornered crypto miners into a difficult position of winding down operations of their GPU infrastructure while demonstrating a return on these compute assets at the same time. With the colossal proliferation of AI and HPC workloads, crypto miners have figured out that pivoting to AI will give them a 2x benefit—keeping the lights on in their GPU data centers while also raising their margin profiles. Even better, many crypto miners in 2025 scored massive deals with the big spenders, hyperscalers, and frontier LLM labs. All eyes turn to how crypto miners eventually deliver on these big deals in 2026—the year of AI reckoning for these crypto miners. TeraWulf ( WULF ) and Cipher Mining ( CIFR ) are two such crypto miners who also jumped on the crypto-to-AI pivot bandwagon in 2025. I had previously recommended a Buy rating on both these companies, and I continue to recommend a Buy rating on both of them. TeraWulf and Cipher Mining’s Unique Pivot To AI In the past couple of months, I initiated Buy ratings on TeraWulf and Cipher Mining, citing impressive dynamics engineered in their respective HPC deals. Unfortunately, markets soured on prospects of AI tailwinds since then, with many investors questioning the tenacity of these tailwinds. My view stands firm—that AI is a strong secular force that will positively impact those that invest with AI in mind, and the recent pullbacks in the market give valuations a much-needed respite from the excitement in AI. 2025 has definitely shown the appreciation markets have towards the changing nature of crypto miners’ pivot towards supporting global AI workloads. The operations of all crypto miners typically centered on working towards securing three main resources—GPU, data center infrastructure, and power to support their crypto mining operations. But the severe downturn in crypto this year, as seen in the price of Bitcoin, the mothership of all cryptocurrencies, has complicated the business model of crypto miners. This can be seen in the declining hash rate index, a closely watched yardstick for the crypto mining industry’s revenues. Exhibit A: Hash price index drops to record lows this year. (Hashrate Index) A declining hash rate index should have been alarming for the crypto mining industry because it indicates stress in the business environment for crypto miners along with risks to profitability. But in 2025, we also saw a strong divergence where stocks of crypto miner companies decoupled from Bitcoin ( BTC-USD ), as seen below. Exhibit B: Crypto miner stocks represented by CoinShares’ Bitcoin Mining ETF decouples from the sluggish price of Bitcoin. (Seeking Alpha) With the volume of AI and HPC workloads surging, demand for compute has also skyrocketed. So far, hyperscalers had attempted to keep up with their need for compute by raising their capex budgets well beyond 50-60% CAGR rates. Exhibit C: Hyperscaler capex so far has surged to meet intense demand for compute. (bloomberg) But the intense scrutiny on the free cash flows of hyperscalers seen in the past 2-3 months will have surely put a lid on the days of 50-60% capex CAGR that is expected to slow down to just 25% by the end of this year . Faced with this conundrum of slowing capex along with rising compute needs, hyperscalers are increasingly going to crypto miners, who are in prime position to quickly scale data center capacity because most of the crypto miners already have contracts in place with their respective power companies and infrastructure providers to bring data center compute online. Of all the crypto miners who have been racing to score deals where they offer up their compute and power resources to hyperscalers in exchange for annualized subscriptions, TeraWulf and Cipher Mining stand out in the crypto miner complex. Both TeraWulf and Cipher Mining have only one major client in common, Alphabet’s Google Cloud via Fluidstack, which is not just a customer of TeraWulf and Cipher’s data center infrastructure. Google is also an investor in both these companies, clearly announcing its vested interest in TeraWulf and Cipher Mining. In TeraWulf’s case, Alphabet will lease >200 MW of critical compute capacity via Fluidstack, which is expected to bring in ~$10B in revenues over the next decade. TeraWulf recently secured all the necessary financing to help them start building out the capacity for Google and Fluidstack, putting them on track for capacity delivery by H2 2026. One of the reasons TeraWulf may have been successful in favorably securing financing to support the build-out is because Google is backstopping their partnership with TeraWulf. The backstop implies Google Cloud is guaranteeing TeraWulf a total of ~$3.2B in lease obligations. The backstop, along with Google’s ~14% stake in TeraWulf (as part of the deal), has helped the crypto miner in securing project finance. Cipher Mining’s partnership between Google Cloud and Fluidstack is almost the same, except Cipher Mining is offering up a total of 207 MW of capacity by January 2027 to Google/Fluidstack. In exchange, Alphabet is also investing 5.4% in Cipher Mining while backstopping the partnership by ~$1.73B. Analysts were expecting the Cipher’s HPC revenue to come in at ~$127M in 2026, significantly rising to ~$740M in 2027. Exhibit D: Cipher Mining’s revenue mix shifting in 2026 to HPC. (S&P Intelligence) That was before Cipher Mining announced another hyperscaler win with Amazon's ( AMZN ) AWS to deliver ~300 MW of capacity. The total deal is worth ~$5.5B over 15 years. As it now stands, Wall Street is projecting a 66% jump in Cipher’s 2026 revenues, while TeraWulf’s revenues are expected to rise 132%. Valuation Levels For Cipher and TeraWulf If investors look at both TeraWulf and Cipher Mining, they will see that both these companies are trading at forward revenue multiples of ~13-14x. On the face of it, it appears that TeraWulf would look more attractive due to TeraWulf’s 132% projections in 2026 revenues. Exhibit E: Cipher Mining’s 2026 revenue multiple vs TeraWulf’s 2026 revenue multiples. (yCharts) However, I believe that Cipher’s revenue expectations are not accurately capturing the company’s ~300 MW agreement with Amazon’s AWS. I estimate the AWS deal can add at least $50M, if not more, to Cipher’s HPC revenues, pushing up the growth rates in Cipher’s 2026 revenues. Previously, I had explained why I believe Cipher’s shares warrant a forward revenue multiple of ~21-22x. That provides scope for Cipher’s revenue multiple to expand by ~45% from current 2026 revenue multiples of 14.5x, implying ~45% upside in Cipher’s shares. For TeraWulf, we can assume a similar expansion in its multiples if we compare TeraWulf vs Cipher Mining. That does provide scope for revenue multiple expansion in TeraWulf from 13.5 to ~21-22x, implying upside of ~50% in TeraWulf’s shares. Risks & Other Factors To Note However, in TeraWulf’s case, investors must note the risk of TeraWulf’s capital structure as compared to Cipher Mining. TeraWulf has ~$711M in cash vs. $1.1B in debt. Compared to TeraWulf, Cipher Mining boasts $1.2B in cash and $1B in debt. This means Cipher trades at an impressive multiple to its book value of just 8x, while TeraWulf richly trades at a book value multiple of 21x. At a broader level, 2026 will also be the year that will test the level of commitments of crypto miners. Many crypto miners have moved quickly to secure agreements with hyperscalers in the last few months and are quickly working to honor these commitments to bring only many megawatts of compute infrastructure. If these commitments are not honored, crypto miners risk losing millions of dollars' worth of revenues as well as losing the credibility of their business plan to pivot to AI. Takeaway 2026 will be a crucial year for crypto mining companies, which have used 2025 to pivot to AI and HPC workloads. TeraWulf and Cipher Mining stand out as two mining companies that are well positioned to benefit from the industry pivot towards AI. I am reiterating my Buy rating on both TeraWulf and Cipher Mining and updating my PT above.
