TeraWulf Inc. (WULF) shares jumped nearly 7% on Thursday after the company announced plans to raise around $3.5 billion in debt to finance a new AI-focused data center campus in Kentucky. The financing package, which includes the company's first leveraged loan and high-yield bonds, is being led by Morgan Stanley. TeraWulf has pivoted from its cryptocurrency roots to focus on artificial intelligence infrastructure, recently signing a 20-year lease with Anthropic PBC that is projected to generate approximately $19 billion in revenue over its term.
TeraWulf Plans $3.5 Billion Debt Financing for Kentucky Data Center
TeraWulf plans to raise around $3.5 billion in debt, including its first leveraged loan, to finance the new data center campus in Kentucky. The deal is expected to launch this year, with Morgan Stanley leading the financing effort, according to Chief Financial Officer Patrick Fleury, reported Bloomberg.
The potential transaction would also include high-yield bonds. TeraWulf sold $1.3 billion of such debt in December and $3.2 billion in October, stated the Bloomberg report.
Anthropic Signs 20-Year Lease Generating $19 Billion in Projected Revenue
TeraWulf signed a 20-year lease with Anthropic PBC on Monday for its Kentucky facility. The deal is reportedly expected to generate about $19 billion in revenue and includes two five-year extension options.
The campus, known as Justified Data, is being built in Hawesville, about an hour from Louisville. Anthropic has also agreed to lease computer chips at two other TeraWulf data centers, Bloomberg reported in June.
Morgan Stanley Leads Financing and Raises Price Target to $72
Morgan Stanley has led TeraWulf's bond offerings, and the companies have discussed tapping the leveraged loan market. Many of the lenders that participated in TeraWulf's $250-million revolving credit line earlier this year could also be involved in the Justified Data deal, Fleury said, reported Bloomberg.
On Wednesday, Morgan Stanley raised its price target on TeraWulf to $72 from $66.50, implying more than 215% upside from the stock's last close. The firm also maintained an 'Overweight' rating on the shares, according to TheFly.
Retail Investors Show Extremely Bullish Sentiment on Stocktwits
On Stocktwits, retail sentiment for WULF was 'extremely bullish,' unchanged in the past 24 hours, while message volume was 'extremely high' at the time of writing.
Over the past seven days, message volume for the stock has surged 191%, while the ticker's watcher base has risen 4.6% in the same period, indicating steady growth of retail interest in the stock.
One retail trader on Stocktwits predicted WULF could climb to $45 at least by end of this month. Morgan Stanley's $72 price target was also a key talking point. A retail trader said WULF could climb "3X from here to at least $70 which perfectly aligns with the Morgan Stanley target of $72."
The WULF stock has surged nearly 108% year-to-date.
FAQ
What did TeraWulf announce on Thursday that caused its stock to jump 7%?
TeraWulf announced plans to raise around $3.5 billion in debt to finance a new AI-focused data center campus in Kentucky. The financing package includes the company's first leveraged loan and high-yield bonds, with Morgan Stanley leading the deal.
How much revenue is the Anthropic lease expected to generate for TeraWulf?
The 20-year lease with Anthropic PBC, signed on Monday, is reportedly expected to generate about $19 billion in revenue over its term and includes two five-year extension options.
What price target did Morgan Stanley set for TeraWulf stocks?
On Wednesday, Morgan Stanley raised its price target on TeraWulf to $72 from $66.50, implying more than 215% upside from the stock's last close, and maintained an 'Overweight' rating on the shares.
