Shares of TeraWulf Inc. (NASDAQ:WULF) tumbled 11.9% in late trading on Wednesday, settling at $15.05 and hovering near their session low. The sell-off was part of a broader downturn among companies that have pivoted from bitcoin mining to artificial-intelligence data-center development. Four listed peers—IREN Ltd. (IREN), Cipher Digital Inc. (CIFR), Core Scientific Inc. (CORZ), and Applied Digital Corp. (APLD)—posted an average decline of 13.2%, while CoreWeave Inc. (CRWV) fell a comparatively milder 8.6%.
Bitcoin itself slipped only 0.4% over the same period, a divergence that underscores how investors are now viewing TeraWulf less as a cryptocurrency proxy and more as a leveraged play on AI infrastructure. The stock's 11.9% drop outpaced the ex-miner group by roughly 1.3 percentage points but lagged CoreWeave by 3.4 points, placing TeraWulf in an intermediate spot—no longer purely a bitcoin play, yet still years away from realizing its major AI projects.
The broader technology sector faced headwinds as the PHLX semiconductor index fell 2.2%, reflecting rising concerns about the pace and sustainability of AI-related capital expenditure. Adding to the cautious sentiment, the Federal Reserve held its benchmark interest rate steady at 3.50%–3.75%, while three policymakers voted for a rate hike, signaling persistent inflation worries.
TeraWulf's investor-relations website showed no fresh operational updates as of Wednesday; the most recent posting remained the July 22 alert about its August 5 earnings call. This absence of company-specific news suggests the share price decline is tied to sector-wide trends rather than any new developments within TeraWulf. The market appears to be reassessing the risks and timelines associated with the miner-to-AI transition.
A key question for investors is whether the contract rates TeraWulf secures adequately compensate for construction delays. The company's recent 20-year, 401-megawatt deal with Anthropic is reported to generate about $2.37 million per megawatt-year, based on the $19 billion total revenue divided by the contract's length and capacity. That figure is at least 27% higher than the $1.86 million per megawatt-year implied by its earlier 10-year, 360-megawatt agreement with Fluidstack. However, these are gross revenue comparisons, not profit measures, and the contracts differ in capital costs, annual escalations, services, and power agreements.
Chief Executive Paul Prager hailed the Anthropic lease as validation of the company's strategy, but rental payments will only begin once TeraWulf delivers the capacity—the initial phase is scheduled for the latter half of 2027. The long timeline is significant: higher contract prices bolster the backlog but do not generate immediate cash flow, and revenue deferred several years is worth less when expected investment returns rise.
Looking ahead, the August 5 earnings update will be a critical test. Preliminary Zacks consensus forecasts second-quarter revenue of $44.71 million, a 6.2% decline year-over-year, with analysts projecting a per-share loss of $0.20. In the first quarter, TeraWulf reported $34.0 million in revenue, of which $21.0 million—roughly 62%—came from high-performance computing leases. The company also disclosed $3.1 billion in cash and restricted cash. Investors will scrutinize delivery timelines at the Lake Mariner facility and the start of new leases to gauge whether current revenue aligns with the contracted backlog.
Risks remain elevated. New York's July 14 directive could halt unfinished state permit requests for data centers drawing 50 megawatts or more, though the specific impact on TeraWulf's projects has not been determined. Other ongoing risks include construction cost overruns, access to funding, power supply constraints, and potential delivery delays. For now, TeraWulf is viewed primarily as a leveraged AI-infrastructure developer rather than a bitcoin proxy. The August 5 call will need to demonstrate tangible progress from committed megawatts to operational, revenue-generating capacity.
