TeraWulf Inc. (NASDAQ: WULF) shares experienced a significant downturn, falling 10.18% to $21.18 on Thursday, July 5, the final trading session before the Independence Day holiday. This decline extended a losing streak to seven consecutive sessions through July 2, with the stock shedding 26.4% from its June 23 close of $28.78.
The selling pressure occurred despite a 2.1% gain in the Nasdaq Composite during the holiday-shortened week. The broader market's resilience contrasted sharply with the weakness in AI infrastructure stocks, highlighting sector-specific concerns.
Investor sentiment toward neocloud and AI data-center names soured following reports that Meta Platforms Inc. (NASDAQ: META) is launching a cloud business to sell excess AI computing capacity. This development rattled the sector, with CoreWeave Inc. (NASDAQ: CRWV) falling 10.8% and Nebius Group NV (NASDAQ: NBIS) dropping 12.4% on the news. Analysts warned that Meta's entry could increase supply and reduce demand for third-party services. Gil Luria, managing director at D.A. Davidson, noted, "Adding Meta's capacity will probably affect neoclouds more than the big hyperscalers. CoreWeave and Nebius depend on Meta for growth, but Meta might not need them now."
TeraWulf's business model has shifted significantly from its bitcoin mining roots. In the first quarter of 2026, high-performance computing (HPC) lease revenue reached $21.0 million, accounting for approximately 62% of total revenue, while digital asset revenue fell to $13.0 million from $34.4 million a year earlier. The company reported total revenue of $34.0 million, essentially flat year-over-year. Net loss attributable to TeraWulf was $427.6 million, or $1.01 per share, and cash and restricted cash stood at $3.09 billion at quarter-end.
CEO Paul Prager emphasized the company's pivot toward recurring contracted revenue. In May, he announced that TeraWulf had "60 megawatts of energized critical IT capacity for Core42" at its Lake Mariner facility and is building capacity for its next tenant, Fluidstack. CFO Patrick Fleury stated that the business should increasingly rely on "recurring, contracted revenue" as it scales.
A key long-term initiative is the Muskie Data Campus in eastern Kentucky, acquired on May 26. The site is planned to eventually handle over 1 gigawatt of capacity, with the first 500 megawatts expected in the second half of 2028 and the next 500 megawatts in the second half of 2030. Prager remarked, "The defining constraint in this market is no longer computing hardware — it is power, transmission infrastructure, and execution certainty."
Despite the recent sell-off, TeraWulf shares held above Thursday's low of $20.60, closing at $21.26 in after-hours trading on July 2. A break below that level could signal a return to the stock's pre-Kentucky rally range from late May. The company's investor relations page has not posted any new announcements over the holiday break, with the most recent press release being the Muskie acquisition and the latest 8-K detailing annual meeting voting results from June 10.
