Applied Digital shares have dropped 27% over three months as investors worry about high financing costs and rising debt tied to AI data center build-outs. Revenue for fiscal Q1 2027 (ended Aug. 31) jumped 322% to $342 million after delivering 75 MW of capacity, bringing active capacity at Polaris Forge 1 to 250 MW, and management expects to bring 600 MW more online over the next 12 months. The company has $36 billion in contracted lease revenue, but debt rose to $6.4 billion from $687 million a year earlier and interest expense surged 866% to $77.4 million, though more than 80% of the debt matures in fiscal 2031 or later. The 12-month median price target of $69 implies a 255% gain, with 18 of 20 analysts rating the stock Buy, and the article calls the 6.5 price-to-sales ratio cheap given its revenue growth. SemiAnalysis expects 25 GW of net data center capacity to be added in 2026, up from 15.6 GW last year.
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