How Much Should This Fall Change Your View Of Applied Digital Stock?

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Applied Digital (APLD) stock fell 52% from February 15 to November 12, 2026, while the S&P 500 gained 12%. Over those months the company kept signing long data center leases, among them a $7.5 billion lease at its Delta Forge 1 site, announced on April 23. Shareholders are betting those leases turn into rent, and that Applied Digital can pay for its data centers until the rent arrives. So how much rent is Applied Digital collecting so far?

How Much Rent Is Applied Digital Collecting So Far?

Rent accounts for only a small portion of the new revenue so far. Applied Digital posted $342 million in revenue for fiscal Q1 2027, the quarter ended August 31, 2026, up 322.4% from a year earlier. Yet management said on the October 7 call that its HPC hosting business booked $65.8 million of base rent that quarter. By comparison, the company recorded $183.5 million for tenant fit-out services, the work of equipping a building for an incoming occupant.

Profit on those sales has also narrowed. Gross margin was 15.3% in fiscal Q1 2027, down from 42.5% in the quarter ended February 28, 2026. That February quarter stood out, though: margin was 20.6% the quarter before it and 15.7% the quarter after.

Most rent collection lies ahead because the majority of capacity is not yet in service. Management expects to place over 600 megawatts into service over the next 12 months, compared with 250 megawatts over the past 12.

How Is Applied Digital Paying For Its Data Centers?

Applied Digital is financing them mostly with borrowed money. Its total debt reached $6,483 million on August 31, 2026, up from $700 million a year earlier, while the company held $2,950 million in cash and short-term investments.

The day-to-day business generates cash, bringing in $235 million from operations over the twelve months to August 31, 2026. Building the facilities costs significantly more, however, and free cash flow over the same twelve months was negative $4,455 million. The company also lost $463 million over that period.

Management said more than 80% of the debt principal does not come due until fiscal 2031 or later, pushing the bill for the build-out years into the future. Even so, Applied Digital’s debt now equals 131.2% of its market value, compared with 19.5% for the S&P 500.

What The Fall Has Not Changed At Applied Digital

The stock decline has not altered the contracts underpinning the business. On its October 7 call, management put Applied Digital’s contracted revenue at about $36 billion across 5 campuses. Its next three campuses to be financed, Polaris Forge 3, Delta Forge 1 and Delta Forge 2, are all leased to the same Tier 1 investment-grade hyperscaler under 15-year take-or-pay leases, which commit the tenant to pay for the space whether it uses it or not.

So the leases stand where they did, and construction is moving forward. Applied Digital has yet to show it can keep paying for the build until the rent catches up. Its free cash flow, set against its debt, is the number to watch when the company reports in January 2027.

Does This Mean You Should Act On APLD?

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