TeraWulf (NASDAQ:WULF) shares experienced a mixed session on Friday, closing at $18.46 after a 7.9% decline, yet managed to post a 1.7% gain for the week. The stock remains 16.9% below its July 6 close, which followed the announcement of a landmark $19 billion lease agreement with Anthropic.
Lease Economics Stand Out
Preliminary calculations based on disclosed terms value the Anthropic contract at approximately $2.37 million per megawatt-year. This figure is roughly 28% above two comparable AI-infrastructure agreements, including Hut 8's second Beacon Point lease and TeraWulf's earlier contracts with Fluidstack. However, these comparisons are not apples-to-apples, as lease structures, escalators, services, and delivery schedules vary significantly.
Contract Details and Credit Support
The lease with Anthropic spans 20 years and covers 401 megawatts of critical IT load. Rent payments commence only upon delivery of each phase, with initial capacity expected in late 2027 and full capacity by early 2028. According to TeraWulf's regulatory filing, Anthropic's payment obligations are anticipated to carry investment-grade backing, providing additional credit support.
CEO Paul Prager commented, "The Anthropic lease validates our strategy and establishes a long-duration revenue stream."
Funding and Capital Intensity
The company faces a substantial funding bridge. TeraWulf separately agreed to sell its 50.1% stake in the Abernathy venture for about $530 million, representing an 18% gross premium over its disclosed $450 million investment. The consideration is staged, with $250 million due within 14 days, $150 million by December 31, and approximately $130 million by April 30, 2027.
First-quarter figures highlight the capital-intensive nature of the business. High-performance computing (HPC) contributed 62% of revenue, while investing cash outflow reached $712.8 million. Cash plus restricted cash stood at $3.09 billion on March 31. Subsequent equity sales raised about $1.23 billion gross, strengthening funding capacity but diluting existing shareholders.
Market Context and Sector Performance
Friday's decline was not isolated within the AI infrastructure space. CoreWeave (NASDAQ:CRWV) lost 11.4%, while IREN Limited (NASDAQ:IREN) fell 8.7%. However, weekly paths diverged, with IREN gaining 10.3% and CoreWeave slipping 1.8%, leaving TeraWulf's 1.7% rise in the middle.
Near-term catalysts include the Federal Open Market Committee meeting on July 28-29, where borrowing-cost expectations could move capital-heavy AI infrastructure stocks. TeraWulf's second-quarter earnings call is scheduled for August 5 at 08:00 EDT, where investors will seek updates on cash, capital spending, and construction progress, as well as confirmation of the first Abernathy payment.
Risks and Outlook
Key risks include construction delays, power constraints, financing costs, and permit changes that could reduce project returns. Further equity issuance would dilute existing holders. Despite these challenges, the lease economics appear strong, and the next catalyst for a rerating will likely be proof of delivery.
