Strategy vs. TeraWulf: Which Bitcoin Stock Is Worth Betting On?

Core Insights - Strategy (MSTR) and TeraWulf (WULF) are both focused on Bitcoin but operate under fundamentally different business models [1][2] - MSTR is a Bitcoin treasury company with a legacy software business, while WULF is a pure-play Bitcoin miner emphasizing low-cost, energy-efficient operations [2][3] MSTR Overview - MSTR holds 709,715 bitcoins as of January 21, 2026, with an enterprise value of approximately $68 billion, indicating a systematic accumulation strategy [4] - The company benefits from a profitable software business, achieving 10.9% revenue growth and over 65% subscription growth in Q3 2025 [5] - Improved regulatory clarity and an S&P B- credit rating enhance MSTR's access to capital markets, potentially lowering funding costs [6] - MSTR's share price and earnings are highly correlated with Bitcoin, leading to significant volatility, with unsold bitcoin losses of $17.44 billion in Q4 2025 [7] - The Zacks Consensus Estimate for Q1 2026 earnings is $5.81 per share, a significant improvement from a loss of $16.49 per share year-over-year [8] WULF Overview - WULF operates low-carbon digital infrastructure and has begun generating recurring revenues from high-performance computing (HPC) [13] - The company has secured over $16 billion in long-term HPC lease contracts and aims to add 250-500 MW of HPC capacity annually [14] - WULF's capital intensity has increased due to heavy debt, raising over $5 billion in 2025, leading to total debt of approximately $1.5 billion [15] - The Zacks Consensus Estimate for Q1 2026 loss is pegged at 18 cents per share, slightly worse than a loss of 16 cents reported a year ago [16] Stock Performance and Valuation - MSTR shares have decreased by 43.1% over the past three months, while WULF shares have gained 1.4% [17] - MSTR is trading at a Price/Book ratio of 0.9X, indicating lower valuation risk compared to WULF's 23.07X [21] - Both companies are currently considered overvalued, with a Value Score of F [21] Conclusion - MSTR is viewed as the stronger investment option due to its substantial Bitcoin holdings, improving earnings outlook, and resilient software business [24] - WULF shows momentum from its AI pivot but faces challenges from high leverage and capital intensity, limiting its upside potential [24]