Key Takeaways
- Applied Digital fell 10% this morning with Nebius, CoreWeave and Cipher Digital after Nebius’s soft outlook.
- Applied Digital had no news of its own: the drop reflects sentiment toward its tenants.
- CoreWeave accounts for $11 billion of Applied Digital’s $36.2 billion in signed leases.
- The bigger risk is funding the roughly 800 MW still to be financed, and the January report is the next test.
Applied Digital (APLD) fell 10% this morning with no news of its own. Nebius (NBIS) is off 13% after its results, and CoreWeave (CRWV), one of Applied Digital’s two big tenants, is down 10%. Cipher Digital (CIFR) got swept up too.
Nebius’s delays hit the whole group
Nebius’s third-quarter revenue jumped 571% to $980.8 million, but $325.1 million came from strategic partnerships that Nebius calls non-recurring. BofA said its outlook implies a fourth-quarter step down, as delays at third-party data centers push revenue into early 2027. Add a $40 billion spending plan for 2027, and investors sold the group.
Nvidia added to the worries. After Jensen Huang’s exit as CEO on Thursday, The Information reported that Nvidia is expected to slow its AI investments and credit guarantees. That’s a hit for IREN (IREN), down 10%, which counts Nvidia as a $3.4 billion customer. Cipher fell 9% as The Wall Street Journal reported that Nscale, a private neocloud, needs more financing ahead of its IPO.
$11 billion rides on CoreWeave
Applied Digital’s signed 15-year leases are worth $36.2 billion, and two tenants hold 86%: a tier-one hyperscaler with $20.2 billion and CoreWeave with $11 billion. Analysts expect revenue to more than triple from fiscal 2026 to fiscal 2028:
Most of that is signed rent: minimum lease payments reach $1.58 billion in fiscal 2028, about 80% of that year’s estimate. And CoreWeave’s own revenue is expected to more than double in 2026 and again in 2027:
But its bonds yield over 17%. The leases are non-cancellable, though, and CoreWeave pays about 10% more per megawatt than the hyperscalers.
TIKR tracks 16 analysts on Applied Digital. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Applied Digital, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Applied Digital’s Analyst Ratings
The selloff looks overdone
Applied Digital trades at 4.9x forward sales as of the last close, under half its 3-year average of 11x, and even lower at today’s price:
Nothing from Nebius or Nvidia changes a dollar of Applied Digital’s signed rent, so today’s drop looks overdone to me. What could hurt is the funding bill: CEO Wes Cummins said this month that it still needs to finance roughly 800 MW over the next 12 months, and selloffs don’t make that money cheaper. The fiscal second-quarter report, due in January, is the next test.
So what is Applied Digital stock actually worth?
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