"The recent executive order from Governor Kathy Hochul has thrown a wrench in our plans," said a TeraWulf representative, as the company's stock fell 2.3% to $18.96, marking four straight days of losses. This downturn extends a nearly 19% decline since July 9, reflecting growing investor concern over regulatory changes. The executive order imposes a one-year moratorium on the construction of data centers larger than 50 megawatts in New York, a state where TeraWulf operates its key Lake Mariner and Cayuga facilities.
Despite the stock's poor performance, analysts on Wall Street appear unfazed. Chris Brendler from Rosenblatt maintained a Buy rating with a price target of $30, indicating that the stock could rise by 58% from its current level. He pointed out that the enforcement mechanism of the new policy does not impact TeraWulf's existing operations in New York, suggesting that investors should view the situation as more of a headline risk rather than a fundamental issue.
Cantor Fitzgerald joined the chorus, labeling the selloff a buying opportunity and keeping a price target of $37 for TeraWulf. With numerous analysts standing firm on their positive outlooks some even projecting a price as high as $40 there is a general belief that the market overreacted to the news.
Furthermore, TeraWulf recently secured a significant 20-year lease with Anthropic for a project in Kentucky, valued at $19 billion, which is outside the purview of the New York moratorium. This deal, combined with the company's recent sale of its controlling stake in Abernathy for $530 million, has helped maintain investor interest. While the stock may have dropped 23% this month, many believe the underlying business fundamentals remain strong.
This material is informational and should not be considered financial advice.
