TeraWulf Inc. (NASDAQ:WULF) saw its shares climb 18.1% on Thursday, closing at $17.82, after the Federal Energy Regulatory Commission (FERC) gave the green light for the company to acquire four power generation units with a combined capacity of approximately 216 megawatts in Morgantown, Maryland. The approval marks a critical milestone for the company's Chesapeake Data division, which plans to use the capacity for AI-driven data center operations.
The stock's rally, however, did not fully erase recent losses. Despite the strong single-day performance, shares remain 3.5% below their value on July 24, when the stock traded at $18.46. Over the past week, TeraWulf has gained just 1.7%, lagging behind four key AI-infrastructure peers, which posted an average increase of 24.9% during the same period.
Federal Approval Unlocks AI Infrastructure Potential
The FERC decision is a pivotal step for TeraWulf, as access to the power grid has become a major bottleneck for AI development. The acquisition of the Morgantown units provides a near-term source of energy for the company's planned data center campus. CEO Paul Prager emphasized that the lease with Anthropic, which covers roughly 401 megawatts of critical load, "validates our strategy and establishes a long-duration revenue stream." The campus is expected to begin operations in late 2027, with full capacity anticipated by early 2028.
Initial calculations indicate that the contract with Anthropic offers a revenue-density benefit of up to 35% compared to a recent peer agreement. Specifically, TeraWulf's lease is valued at approximately $2.37 million per megawatt-year, while Core Scientific's disclosed floor with Advanced Micro Devices (AMD) stands at over $1.76 million per megawatt-year. However, these figures exclude escalators, customer funding, operating expenses, and varying construction timelines.
Market Context and Sector Performance
Thursday's broader market rally provided a tailwind for TeraWulf. The Nasdaq Composite gained 2.78%, and Bitcoin rose 1.5%, though the cryptocurrency move was not the primary driver for the stock. Shares of Microsoft Corp. (NASDAQ:MSFT) climbed over 15% after a positive outlook, with capital spending coming in below expectations, easing concerns about AI profitability. The Philadelphia semiconductor index surged 8.2%.
Other infrastructure companies tied to the power sector also saw strong gains. Core Scientific Inc. (NASDAQ:CORZ) rose 20.4%, IREN Ltd. (NASDAQ:IREN) jumped 30.7%, Cipher Digital Inc. (NASDAQ:CIFR) gained 28.1%, and Applied Digital Corp. (NASDAQ:APLD) increased 20.4%.
Remaining Hurdles and Risks
While the FERC approval is a key step, several obstacles remain. The decision only covers the transfer of ownership; state permits, zoning approvals, and the planned switch to natural gas are still pending. Additionally, PJM's market monitor has cautioned that retiring current capacity could transfer costs to consumers. The Anthropic campus will not reach full operation before early 2028, leaving Bitcoin mining exposure as a relevant factor until then.
Investors are also watching TeraWulf's upcoming second-quarter earnings, scheduled for release on Wednesday, August 5, before an 8 a.m. EDT conference call. Early consensus estimates project a loss of $0.24 per share. Key areas of focus include funding, construction outlays, and initial billing dates. As one analyst noted, "The next hurdle is cash. Investors require a clear, financed transition from signed megawatt agreements to generating billable capacity."
