"While most holdings in that portfolio declined sharply - resulting in an overall 30% drop in value since the end of Q3 2025 - Applied Digital was the outlier, with Nvidia's stake rising 208% in total value to over $239 million in early December. This resilience helped shield the portfolio from even steeper losses during a broader AI infrastructure pullback. However, that changed yesterday when Applied Digital shares plunged 17.5%, closing below $23 per share, with no apparent company-specific news triggering the decline."
"Applied Digital's rapid expansion into AI-focused data centers has required substantial financing. In its fiscal first quarter, the company reported $687 million in current and long-term debt alongside $74 million in cash and equivalents, but in November 2025, a subsidiary priced a $2.35 billion offering of 9.25% senior secured notes due 2030 to fund new facilities and refinance existing obligations. The debt is seen as riskier because Applied Digital relies heavily upon CoreWeave ( NASDAQ:CRWV ) as its main tenant ."
Applied Digital designs, builds, and operates next-generation data centers optimized for high-performance computing and AI workloads. The stock gained about 200% year-to-date 2025, and Nvidia's stake rose roughly 208% to over $239 million, making Applied Digital an outlier as other portfolio holdings fell. Shares then plunged 17.5%, closing below $23 per share with no clear company-specific trigger. Rapid expansion required substantial financing: the company reported $687 million of debt and $74 million of cash, and a subsidiary issued $2.35 billion of 9.25% senior secured notes due 2030. Heavy reliance on CoreWeave and lease execution risks threaten cash flows and profitability.
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