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Applied Digital Just Borrowed Another $2 Billion. Its Biggest Customer Is $21 Billion in Debt.

April 02, 2026 — 03:35 pm EDT

Written by

Johnny Rice for

The Motley Fool->

Key Points

- Applied Digital's debt exploded from $468 million to roughly $5 billion in just over a year, with its latest $2.15 billion raise carrying a 6.75% interest rate.

- Nearly 70% of the company's $16 billion contracted revenue pipeline depends on CoreWeave, a heavily indebted company that lost $1.2 billion last year.

- 10 stocks we like better than Applied Digital ›

Applied Digital (NASDAQ: APLD) just added $2.15 billion in new debt at a 6.75% interest rate. That brings total debt to roughly $5 billion, up from just $468 million a little over a year ago. The artificial intelligence (AI)-focused data center operator is betting big on its $16 billion pipeline of contracted lease revenue. But that pipeline has a problem that investors need to understand.

Applied Digital's debt has ballooned to $5 billion

Of the $16 billion, $11 billion comes from CoreWeave -- an AI cloud computing company carrying over $21 billion in debt that lost $1.2 billion last year. It's growing revenue fast, but its debt is growing faster.

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Image source: Getty Images.

A chain of risk that leads to OpenAI

CoreWeave, in turn, depends heavily on OpenAI, another deeply unprofitable AI company. The ChatGPT creator projects $14 billion in losses for 2026 and total losses of $115 billion through 2029. Those numbers are staggering.

Yes, OpenAI is still able to raise funds, but it is becoming increasingly harder, and the headlines are often misleading. Its latest $110 billion funding round comes with some major strings attached from its financers, and only $25 billion is confirmed as near-term cash.

What this means for Applied Digital investors

Applied Digital's pipeline depends on CoreWeave staying solvent, which depends on OpenAI continuing to attract investor capital at a pace that has no precedent, all while the larger macro picture is getting worse. That's a lot of faith baked into the potential success of one stock.

Should you buy stock in Applied Digital right now?

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.