Jefferies Initiates Coverage Of AI-Focused Stocks With Buy Ratings
Jefferies initiated TeraWulf with a buy rating, citing AI data center growth potential. The firm also started Hut 8 Mining with a buy recommendation, highlighting AI data center deals. TeraWulf and Hut 8 were both added by Jefferies with a buy rating amid an AI data center pivot.
Jefferies initiated coverage of WULF (TeraWulf) and HUT (Hut 8 Mining) with Buy ratings on May 14, framing both companies as AI power infrastructure plays rather than cryptocurrency miners. TeraWulf received a $28 price target (roughly 21% upside from ~$23.12 at initiation), with Jefferies describing the company as a "power-first digital infrastructure developer" with a "repeatable model" of acquiring brownfield industrial sites — facilities with existing power and transmission infrastructure — and converting them to AI data centers. Each lease converts dormant grid capacity into contracted cash flow while reducing the company's correlation to bitcoin price movements.
Hut 8 earned a $156 Buy price target (roughly 44% upside from ~$108 at initiation), with Jefferies arguing that on-time AI data center delivery would transform the company from a bitcoin miner with "optionable power" into a credible data center developer with recurring revenue streams. At a ~$12.2 billion market cap, Hut 8 is already pricing in meaningful data center execution — a thesis that InvestingPro's quant model pushes back on with a fair value estimate of $67.16, highlighting the gap between bullish analyst framing and fundamental valuation models. Both initiations share a common thread: Jefferies is betting the market continues to misprice power access as the scarce resource in the AI buildout.
The ratings reflect a broader Wall Street thesis that former crypto miners with industrial land, grid connections, and large power allocations are uniquely positioned to serve hyperscaler and enterprise AI compute demand without the multi-year permitting cycles that greenfield data center development requires. For investors, the key risk is execution timing — both WULF and HUT trade at premium multiples that price in successful data center lease conversion, meaning any delays in customer commitments or construction could compress valuations sharply. TeraWulf's 1-year return of +532% already reflects significant AI data center optimism.
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