Applied Digital (APLD) Drops 17% on AI Bubble Worries

Core Viewpoint - Applied Digital Corp. (NASDAQ:APLD) has experienced significant stock declines due to concerns over the sustainability of investments in AI technology, leading to a 17.52% drop to $22.98 per share amid broader market pessimism [1][3]. Group 1: Stock Performance - Applied Digital's stock has fallen for four consecutive days, reflecting a broader trend of selling pressure in the market [1]. - The stock's decline is in line with other high-performance computing (HPC) companies, driven by worries about the heavy spending on AI by technology giants and the uncertainty of recouping those investments [2]. Group 2: Financial Concerns - Oracle Corp. recently reported a significant increase in debt, reaching $108 billion, as it invests heavily in AI, highlighting the financial strain on companies in the sector [3]. - Applied Digital has also engaged in multiple credit facilities this year to raise billions of dollars aimed at developing its HPC campus pipelines, indicating a reliance on external funding to support its AI initiatives [4]. Group 3: Investment Outlook - While there is potential for APLD as an investment, there is a belief that other AI stocks may offer better returns with lower risk, suggesting a cautious approach to investing in Applied Digital at this time [5].