Applied Digital (APLD) Is Down 20.2% After $2.35 Billion AI Data Center Debt Offering – Has The Bull Case Changed?

• In November 2025, Applied Digital Corporation announced that its subsidiary intends to offer US$2.35 billion in senior secured notes to fund the construction of two large data centers at its Polaris Forge 1 campus in North Dakota, and repay existing credit facilities.
• This financing effort marks an ambitious expansion into AI infrastructure, further highlighted by a new long-term colocation agreement with a leading AI hyperscaler, signaling a pivot from blockchain to AI-focused operations.
• We'll explore how this major US$2.35 billion debt financing to expand AI data centers could reshape Applied Digital's growth outlook.

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Applied Digital Investment Narrative Recap

To be a shareholder in Applied Digital right now means believing in the company’s ability to execute a rapid transformation from blockchain-driven revenues to powering AI and HPC infrastructure. The recent US$2.35 billion senior secured notes offering has direct implications for the most important short-term catalyst, the buildout and leasing of new AI-focused data centers, while also heightening the risk that higher leverage and large capital commitments will pressure margins if projected customer demand falls short.

Among several recent announcements, the 15-year, US$7 billion data center lease agreement with a leading AI hyperscaler stands out as most relevant. This contract underpins future recurring revenue and supports the company’s pivot to AI, directly tied to the success of the new data center expansion and helping offset some of the immediate risks from rising debt and capital intensity.

However, investors should also be aware that with this substantial debt raise, if customer demand does not meet expectations...

Read the full narrative on Applied Digital (it's free!)

Applied Digital's narrative projects $755.7 million in revenue and $102.2 million in earnings by 2028. This requires 73.7% yearly revenue growth and a $263.2 million increase in earnings from -$161.0 million today.

Uncover how Applied Digital's forecasts yield a $43.70 fair value, a 65% upside to its current price.

Exploring Other Perspectives

Thirty-two recent fair value estimates from the Simply Wall St Community for Applied Digital range from as low as US$2.89 to as high as US$43.70. While community views differ, the company’s reliance on large hyperscaler contracts remains a key influencer of future performance and should be considered when weighing such a broad range of opinions.

Explore 32 other fair value estimates on Applied Digital - why the stock might be worth less than half the current price!

Build Your Own Applied Digital Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Applied Digital research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Applied Digital research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Applied Digital's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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