By Johnny Rice, The Motley Fool
Publication Date: 2026-03-03 19:13:00
As the beating heart of the artificial intelligence (AI) boom, Nvidia is a kingmaker in the industry. When it takes a stake in a company, the market pays attention — so too when it exits a position.
And that’s exactly what Nvidia has done with AI data center developer Applied Digital (NASDAQ: APLD). After acquiring a significant stake in the company, Nvidia just sold all of its 7.7 million shares.
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So what does that mean for investors? If the most powerful company in AI just sold its stake, should you sell, too?
Applied Digital’s growth story is real, and the opportunity is enormous, but the company is walking a financial tightrope to chase it. The company’s debt has exploded from $44 million in Q1 of fiscal 2024 to $2.6 billion by November 2025, a staggering increase in a little over a year.
And this isn’t a profitable company absorbing leverage from a position of strength. Applied Digital is operating in the red, losing $125 million over the last 12 months. That alone would be enough to raise yellow flags, but the risk looks even worse when you consider where the revenue is supposed to come from.
Applied Digital’s future hinges on roughly $16 billion in contracted lease revenue, spread over 15 years. Just two companies account…
