Key Takeaways
- Applied Digital shares jumped [10%] today as AI infrastructure stocks bounced back from last week’s selloff, with IREN up [5%] and CoreWeave up [2%].
- Goldman Sachs helped spark the rebound by upgrading CoreWeave, a tenant of Applied Digital, to Buy, while Applied Digital had no news of its own.
- Applied Digital spent $2.87 billion on capital expenditures in the year ended May 2026, and its interest expense rose to $77.4 million in the quarter ended Aug. 31.
- Analysts expect revenue to reach $3.03 billion in fiscal 2029, but until rent covers interest, the stock is likely to keep trading on interest rates.
Applied Digital (APLD) shares jumped 10% this morning, leading a rebound in AI infrastructure stocks after last week’s rout. IREN (IREN) rose 5%, and CoreWeave (CRWV) gained 2%.
Applied Digital put out no news of its own. It’s riding a Wall Street upgrade for one of its tenants.
A rebound with help from Goldman
Last week, rising bets on a US rate hike hammered the debt-heavy companies building out AI data centers. CoreWeave lost about a quarter of its value.
Then, before Monday’s open, Goldman Sachs analyst Gabriela Borges upgraded CoreWeave to Buy from Neutral, even as she cut her price target to $106 from $139.
That call reaches straight into Applied Digital’s business: CoreWeave leases its Polaris Forge 1 campus in North Dakota.
Built on borrowed money
Applied Digital swings harder than its peers both ways, and its cash flow shows why. In the year ended May 2026, it spent $2.87 billion on capital expenditures as it built out its Polaris Forge and Delta Forge campuses, against $89.7 million of cash from operations.
Debt has filled the gap. As of Aug. 31, Applied Digital carried $6.4 billion of debt against $3.7 billion of cash, cash equivalents and restricted cash, and its interest expense jumped to $77.4 million in the quarter, from $8.0 million a year earlier.
Its base rent that quarter? $65.8 million. (Interest income of $35.8 million softened the blow.)
Rent has to catch up
The leases are there. As of Aug. 31, Applied Digital had leases for about 1.41 GW across five campuses, worth about $36 billion of revenue over their initial terms. And revenue jumped 322% in its fiscal first quarter, though $183.5 million of it came from fitting out space for tenants.
Analysts expect revenue to climb from $611 million in the year ended May 2026 to $3.03 billion in fiscal 2029.
Today’s bounce shouldn’t move those estimates: it came from rates and a tenant’s upgrade.
My take: This is a relief rally. Applied Digital will keep trading on the 10-year Treasury yield, still above 5% this morning, until its rent comfortably covers its interest bill.
Of course, every new building that starts paying rent makes that math easier, and the fiscal second-quarter report will show how far it has come.
So what is Applied Digital stock actually worth?
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