Nvidia Just Dumped This AI Stock, but Here’s Why That Might Be a Buying Opportunity

Nvidia (NASDAQ: NVDA), the world’s leading producer of data center GPUs, is one of the world’s most important artificial intelligence (AI) companies. So whenever it invests in a smaller AI company, it’s considered a bullish stamp of approval.

But when Nvidia sells one of those stocks, it’s considered a grim warning. For example, Nvidia accumulated 7.7 million shares of the AI data center builder Applied Digital (NASDAQ: APLD) in September 2024, but it sold that entire stake for about $177 million in the fourth quarter of 2025. Let’s see why Nvidia sold that hot AI stock — and why it might still be worth buying.

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Applied Digital builds and buys data centers, then leases them to companies that install their own servers. It originally rented those data centers to Bitcoin (CRYPTO: BTC) miners and other blockchain companies, but it pivoted toward the cloud and AI markets in 2022.

The rapid growth of those markets lit a fire under Applied Digital’s business, and it launched its own cloud-based AI infrastructure service in 2023. That new business grew rapidly, but it was unprofitable while competing against some of its own data center customers.

Last December, it announced it would spin off its cloud…