Applied Digital (NASDAQ:APLD) fell 4% to around $19.59, alongside declines in TeraWulf (WULF) and Core Scientific (CORZ), as investors pulled back from debt-funded AI data center developers. JPMorgan cut the company's project finance bonds to Neutral from Overweight, citing a looming supply overhang as it prepares more borrowing, while it carried $6.4 billion of debt against $3.7 billion in cash and restricted cash at the end of Q1 FY2027. Management says it aims to keep one of the industry's strongest balance sheets through most of the construction phase. Q1 revenue rose 432.4% year over year to $341.9 million, beating expectations of $124.6 million, yet the company posted a $184 million net loss under standard accounting rules. Its bull case rests on 1.41 gigawatts of leased critical IT load and $36 billion of contracted revenue over initial lease terms, and the next debt raise will test whether borrowing costs stay favorable.
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