Core Insights - The Bitcoin mining sector is transitioning towards digital infrastructure and AI hosting to diversify revenue streams [2] - TeraWulf focuses on zero-carbon energy and expanding AI and high-performance computing (HPC) capacity, while Riot Platforms is one of the largest pure-play miners with a growing data-center footprint [2][3] TeraWulf (WULF) Overview - TeraWulf has 245 megawatts of mining capacity but faces revenue risks due to Bitcoin price volatility and rising network difficulty [4] - The company raised over $5 billion in 2025, increasing total debt to approximately $1.5 billion, which raises refinancing and interest expense risks [5] - TeraWulf's stock fell nearly 11% to $11.57 as investors expressed concerns over heavy AI spending [6] - The company secured over $16 billion in long-term HPC contracts, providing strong revenue visibility [7] - Management targets 250-500 MW of new HPC capacity annually, supported by various expansion projects [8] Riot Platforms (RIOT) Overview - Riot Platforms operates 1.86 GW of power capacity, positioning itself for future AI and HPC growth [9] - The company reported Q3 revenues of $180.2 million and net income of $104.5 million, benefiting from operating leverage and power curtailment credits [11] - Growth opportunities include AI and HPC development at the Corsicana site, with plans to scale to 1 GW over time [12] - Production fell 14% year-over-year to 428 BTC in November 2025, influenced by market volatility [13] Stock Performance and Valuation - TeraWulf shares increased by 215.3% over the past six months, while Riot Platforms gained 40% [14] - TeraWulf trades at a forward price-to-sales (P/S) multiple of 13.71, significantly higher than Riot Platforms' 6.8, indicating higher execution and financing risks for TeraWulf [18] - Riot Platforms offers a more balanced profile with lower EV per available megawatt and a proven in-house development team [15][16] Conclusion - TeraWulf presents strong growth potential in AI and HPC but carries higher risks due to premium valuation and leverage [21] - Riot Platforms is seen as a better investment choice due to greater scale, lower valuation, and stronger financial flexibility [21][22]