TeraWulf Inc. shares dropped 26.4 percent over seven consecutive losing sessions through July 2, 2026, closing at $21.18 before the Independence Day holiday break.
Investors weighed high operational costs and a broader shift in the artificial intelligence data-center market.
The sell-off erased approximately $3.2 billion from the company's market capitalization, lowering its total valuation to $9.0 billion.
The decline intensified after reports that Meta Platforms Inc. plans to launch its own cloud business to sell surplus AI computing power, stoking fears of increased market supply.
Financial Performance Overview
Financial reports for the first quarter of 2026 showed TeraWulf recorded $34.0 million in total revenue alongside a net loss of $427.6 million, driven by heavy depreciation, interest costs, and asset impairments.
High-performance computing lease revenue reached $21.0 million, representing roughly 62 percent of overall revenue.
Digital asset revenue dropped to $13.0 million from $34.4 million in the prior year's quarter.
The company maintains $3.09 billion in cash and restricted cash against more than $4.68 billion in long-term debt.
Free cash flow for the latest reported period remained deeply negative at negative $541 million.
"Adding Meta's capacity will probably affect neoclouds more than the big hyperscalers," stated Gil Luria, managing director at D.
A. Davidson.
"CoreWeave and Nebius depend on Meta for growth, but Meta might not need them now," Luria added.
Market analysts noted that the expansion of primary tech firms into internal cloud infrastructure alters the outlook for specialized external service providers.
The shift particularly pressures firms that rely on third-party computing partnerships for sustained growth.
TeraWulf has continued its infrastructure development despite the financial shortfall.
The company previously announced the acquisition of the Muskie Data Campus in eastern Kentucky to secure long-term capacity.
"The defining constraint in this market is no longer computing hardware — it is power, transmission infrastructure, and execution certainty," stated Paul Prager, CEO of TeraWulf.
The company plans to develop the Kentucky site to handle over 1 gigawatt of power, with the initial 500 megawatts scheduled to go operational in the second half of 2028.
Traders continue to monitor technical support levels near $20.60 as regular market sessions resume.
"Preparation plus patience leads to big profits," stated penny stock trader and teacher Tim Sykes.
"Volatile stocks are great teachers — they reward discipline and punish hope," Sykes added.
