Applied Digital shares fell 6.5% on Friday following reports of a power outage at its AI data center campus in Ellendale, North Dakota. The decline occurred on elevated but thin holiday trading volume, signaling a headline-driven reaction rather than a change in fundamentals. Midday trading also saw a separate 5.5% drop, with volume of 4.06 million shares, down 88% from its 34.78 million average session volume, underscoring investor caution around operational reliability at its high-density facilities.

The company reports $16 billion in contracted revenue over the next 15 years, with approximately $11 billion tied to its partnership with CoreWeave and the remaining $5 billion from another unnamed hyperscaler. This backlog represents long-term visibility and supports revenue growth expectations. In its most recent quarter, Applied Digital grew top-line revenue by 84% year over year to $64.2 million, driven by new lease agreements for its purpose-built data centers and expanding GPU-as-a-service contracts.

Applied Digital has accelerated its data center deployment timeline from 24 months to between 12 and 14 months by securing key land and power agreements and streamlining construction through a $5 billion project-level financing facility with Macquarie Asset Management. The company currently has an active development pipeline totaling 4 gigawatts of AI data center capacity, positioning it to capture surging demand from hyperscalers and AI firms facing a shortage of specialized facilities.

Investors will focus on the fiscal 2026 second-quarter report due January 7, with consensus revenue estimates around $82 million. In Q1, Applied Digital recorded a net loss of $26.2 million and negative cash flow of $82 million, reflecting upfront construction and depreciation costs. Key metrics to watch include progress toward cash-flow breakeven and any updates on new long-term contracts or improvements in operating margins as facility utilization ramps up.