Applied Digital's stock fell 35.6% over the last three months. The company underperformed its peers in the AI data-center infrastructure space. Concerns over its aggressive, capital-intensive expansion strategy drove the decline.
The company spent approximately $2.87 billion on property and equipment in fiscal 2026. This represented a substantial increase from the previous year. Heavy capital requirements, rising leverage, and potential shareholder dilution pressured the stock. Investors weigh the long-term potential of $36 billion in contracted revenue. They also consider near-term financial risks and long lead times for new capacity to generate revenue.