Applied Digital stock under pressure as debt load tests its AI data center ambitions

The former Bitcoin miner has a $36 billion contracted backlog, but roughly $6.4 billion in debt is drawing investor scrutiny. The company carries approximately $6.4 billion in debt against roughly $2.9 billion in funds on hand and needs financing for about 800 megawatts of new capacity over the next year, at a time when borrowing costs are rising.

Applied Digital has spent the last few years transforming itself from a crypto miner into an AI infrastructure company. Revenue for fiscal Q1 2027 came in at $341.9 million, a 322% jump from the same quarter a year earlier, though net loss reached $221 million.

Revenue growth, rising costs

Most of Applied Digital's growth came from high-performance computing leasing, which means renting out data center capacity to customers running power-hungry AI workloads. However, interest expense hit $77.4 million, while rent collections came to $65.8 million, indicating the company is spending more on debt than it's collecting from tenants.

Transition challenges

Applied Digital still operates 286 MW of legacy Bitcoin mining capacity while reporting a contracted revenue backlog of $36 billion spread across five campuses focused on long-term AI leasing. The company urgently needs funding for an additional 800 MW of capacity in the next year as part of a broader 1.4 gigawatt development plan.

The company's concentration risk with tenant CoreWeave, which accounts for a significant portion of its leasing revenue, adds another layer of complexity to its business model. Investors will watch for new debt or equity raises, changes in the interest-to-rent ratio, and progress on the 800 MW expansion target.