Applied Digital Falls 8% as Nebius Capex Plan and Huang Exit Hit AI Data Center Stocks

Applied Digital fell 8% to $16.45 in Thursday morning trading, giving back its entire 7% gain from November 11, when the stock closed at $17.91. The sell-off wiped across the AI data center trade after two shocks landed before the open: a weak outlook from AI cloud provider Nebius, and the resignation of NVIDIA CEO Jensen Huang.

Nebius reported its Q3 2026 results on November 12 and guided to 2027 capital expenditures of $40 billion to $45 billion. That spending load raises questions about how quickly AI cloud providers can keep leasing the kind of capacity Applied Digital builds. NVIDIA, the chipmaker at the center of AI data center spending, now faces a leadership transition after news of Huang's resignation broke before the market opened and pushed stock futures lower. Technology is the weakest major sector, and the small-cap Russell 2000 index is down 1%.

For Applied Digital, whose first Polaris Forge 1 building was designed for liquid-cooled NVIDIA systems, the leadership change adds another layer of uncertainty. Heavy borrowing makes the company especially sensitive to questions about how AI customers pay for capacity.

Why Debt Costs Hit Applied Digital Harder

Morgan Stanley analyst Stephen Byrd kept an Equal Weight rating on Applied Digital on November 9 and cut his price target to $25 from $41. Byrd raised the discount rates and debt costs he assumes across the AI data center group. The numbers behind the cut are stark. Applied Digital's interest cost, including capitalized interest, was $113.1 million in the quarter ended August 31 — well above its $65.8 million of base rent.

CEO Wes Cummins stated on November 2 that the company still needs funding for roughly 800 MW over the next 12 months. The Louisiana campus could back up to $4.6 billion of local revenue bonds, though no rate has been set. CoreWeave, an AI cloud provider, is among the tenants.

How Far Did the Peers Fall?

The damage spread across the Bitcoin-mining-to-AI convert cohort, though all of them fell less than Applied Digital:

• Cipher Digital (CIFR): $6.80, down 4%. Morgan Stanley also cut its price target on November 9. Like Applied Digital, it's converting former Bitcoin mining power and land into AI and HPC data centers, so it faces similar financing and tenant questions.
• Core Scientific (CORZ): $13.88, down 5%. Last week, Texas's governor-elect promised a data center moratorium following the November 3 midterm elections.
• TeraWulf (WULF): $12.90, down 3%, the smallest decline among the four. In Q3, HPC leasing brought in $62.99 million of TeraWulf's revenue as more Lake Mariner capacity came online.

How Applied Digital Builds Differently From Its Peers

Each of these companies carries a distinct balance-sheet architecture, and the distinctions matter when credit costs rise. Applied Digital owns the land, designs the buildings and operates its AI factory campuses, then leases them to investment-grade hyperscalers under long take-or-pay contracts. Its biggest campuses sit in North Dakota, where cheap power and a cool climate support large builds, and it's expanding into Louisiana and Alabama.

Cipher Digital funds each campus with ring-fenced project bonds and still runs a legacy mining site in Odessa, Texas. TeraWulf backs its Anthropic lease with investment-grade credit support. Core Scientific plans to exit mining by year-end and operate as a pure colocation provider. Every model still depends on tenants that can keep paying for computing capacity as costs rise.

What Comes Next for the Funding Picture?

The open question is whether Applied Digital can finance its remaining expansion at rates its leases can cover. January 2027 brings the company's expected Q2 FY2027 report, which could include the next funding update.

Management's case for optimism rests on demand it calls "extremely robust" and $36 billion of contracted revenue. The bears counter with $6.4 billion of debt and heavy reliance on CoreWeave. Until the funding plan becomes clearer, the gap between those two views — and the stock's volatility — is likely to persist.