TeraWulf slips 4% as AI infrastructure peers trim gains

TeraWulf shares declined 4% to $16.50 during Thursday's midday session, erasing a portion of the company's 43.6% year-to-date advance. The move coincided with a 3% drop in Applied Digital to $26.22 and a 2% slide for IREN to $44.28. According to GN stocks/nasdaq reporting, no new corporate disclosures or macroeconomic shocks triggered the decline, pointing instead to broad positioning adjustments within the AI infrastructure cohort.

The sector-specific nature of the selloff is underscored by the performance of the CoinShares Bitcoin Mining and Digital Power ETF, which fell 4% in parallel with its constituents. In contrast, the Invesco QQQ Trust dropped only 0.84%, indicating that the pressure is concentrated in digital power equities rather than reflecting general weakness across the NASDAQ 100 index.

Operating fundamentals remain unchanged

TeraWulf’s recent financial trajectory shows a shift toward high-performance computing, with Q2 FY2026 HPC leasing revenue reaching $31.93 million. This segment now represents over 70% of the company's total revenue mix, a structural change that remains intact despite the stock's recent volatility. The company’s last major update on August 5 highlighted this expansion, even as GAAP earnings missed expectations.

Peers in the group also report stable or growing operational metrics. Applied Digital posted adjusted EPS of $0.09 on $126.64 million in revenue during its Q3 FY2026 report. IREN reported Q4 FY2026 revenue of $137.2 million, noting that its 2026 capacity is largely sold out. AI Cloud Services revenue for IREN more than doubled sequentially to $70.5 million, confirming demand strength in the sector.

Analyst initiation anchors valuation

Freedom Capital analyst Paul Meeks initiated coverage of TeraWulf with a Buy rating and a $19 price target on Tuesday. This target is notably lower than the current street consensus but remains above the Thursday trading price. The initiation supports the view that the recent dip is a technical correction rather than a fundamental reassessment of the company's long-term value proposition.

Long-term contracts provide revenue visibility

A 20-year agreement with Anthropic for approximately 400 megawatts of capacity at TeraWulf's Kentucky Justified Data Campus underpins the company's future revenue. This deal carries an estimated $19 billion in contracted revenue, a figure cited by Needham in a recent target price raise. The initial delivery for this contract is not scheduled until later, meaning the current stock movement does not reflect any disruption in this long-term pipeline.