Key Points
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Nvidia has sold its entire 7.7 million-share stake in Applied Digital (NASDAQ: APLD).
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Applied Digital’s debt has surged from $44 million to $2.6 billion in just over a year.
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Approximately $16 billion in contracted revenue is dependent on only two customers.
Nvidia’s exit from its stake in Applied Digital underscores growing concerns regarding the latter’s financial stability. The company’s debt escalated dramatically from $44 million in early 2024 to $2.6 billion by November 2025, while it reported a $125 million loss over the past year. This precarious financial situation raises alarms given that its projected $16 billion in future revenue is largely dependent on just two companies, with the majority coming from highly-leveraged CoreWeave.
Applied Digital’s future revenue is at risk, as CoreWeave has provisions that could allow it to exit its lease agreements without penalties under certain circumstances. The narrow revenue base and heavy reliance on a single customer could lead to severe repercussions if market conditions shift. Nvidia’s decision to sell its stake highlights serious reservations about the company’s viability in the competitive AI infrastructure landscape.
