TeraWulf Inc. (NASDAQ:WULF) shares declined 0.9% on Friday, closing at $25.83, as trading volume surged to more than double the 65-day average. The drop came despite the stock's impressive 124.8% year-to-date gain, as investors reassessed the company's lofty valuation amid a broader AI sector pullback.
The stock traded between $24.44 and $26.85 during the session, with volume reaching 66.26 million shares, well above the average of 29.61 million. It remains about 13% below its 52-week high of $29.84 and has surged 512.1% over the past 12 months, according to MarketWatch data.
Valuation Concerns
Based on Friday's close and 495.53 million shares outstanding, TeraWulf's market capitalization stands at approximately $12.8 billion. The company reported first-quarter revenue of $34.0 million, of which $21.0 million came from high-performance computing (HPC) lease revenue. Annualizing that figure yields a price-to-sales multiple of roughly 94 times, underscoring that the stock's value is driven by expectations for future AI-related lease growth rather than current earnings.
The shift in revenue mix is evident: HPC lease revenue accounted for about 62% of first-quarter sales, while digital asset revenue contributed $13.0 million. CFO Patrick Fleury noted in May that the company is transitioning toward "recurring, contracted revenue" to reduce exposure to bitcoin-mining volatility.
Corporate Developments
The only notable corporate news came from Corvex Inc. (NASDAQ:MOVE), which announced that Fleury will stand for election to its board at the next annual meeting. Corvex highlighted that Fleury has led over $8 billion in financings at TeraWulf since 2022. Fleury remarked that the next chapter for AI infrastructure will focus on "performance and trust at scale."
Meanwhile, TeraWulf's investor website shows seven new Form 4 filings from June 25, with the most recent current report dated June 10. The last press release remains the May 26 announcement regarding the acquisition of the Muskie Data Campus in eastern Kentucky.
Growth Catalysts
The Muskie project is central to the company's premium valuation. TeraWulf expects the site to eventually support over 1 gigawatt of data-center capacity, with the first 500 megawatts scheduled to come online in the second half of 2028 and another 500 megawatts planned for the second half of 2030. CEO Paul Prager described TeraWulf as "a power infrastructure company that builds digital infrastructure."
Broader Market Context
AI-linked stocks faced selling pressure on Friday, with the Nasdaq Composite declining 0.24% and the PHLX semiconductor index falling 5.3%. "Questions around profitability and the capex story" remain, said David Stubbs, chief investment strategist at AlphaCore Wealth Advisory, in comments to Reuters. The broader market's jitters over AI spending and returns continue to weigh on high-multiple names like TeraWulf.
