In an interview with CNBC, Applied Digital CEO Wes Cummins said most of the company’s contracted capacity still isn’t paid for.
- Cummins stated that funding options remain available to the company even as borrowing is getting more expensive.
- The CEO said stalled projects from other developers are coming to Applied Digital, though he isn’t pursuing acquisitions aggressively.
- According to him, the company is also on track to meet its target of reaching 3.5 GW to 4 GW of capacity by 2030.
Applied Digital (APLD) shares dropped to an over-one-year low in Monday morning trade with CEO Wes Cummins pushing back against the “neocloud” label and flagging that more than half of its data center capacity is yet to be financed.
“I wouldn’t put us in the neo cloud class,” Cummins told CNBC in an interview. “We’re building data centers. We’re effectively a highly technical real estate business. Long-term leases, high-quality tenants.”
His comments follow Elon Musk’s warning last week that more than 200 neoclouds face “guppy-level death and consolidation.” He stated that access to capital was everything. Shares of CoreWeave (CRWV), Nebius (NBIS) and IREN (IREN) fell on the comments.
APLD stock dropped over 3% in morning trade on Monday , hitting lows last seen in September 2025. On Stocktwits, retail sentiment around the shares trended in ‘bearish’ territory over the past day.
Applied Digital CEO Says 800 MW Still Needs Financing
Cummins also stated that Applied Digital still needs to secure financing for about 800 megawatts of data center capacity over the next 12 months. According to him, so far the company has financed less than half of its planned capacity, about 600 megawatts (MW) out of a total of 1.4 gigawatts (GW).
The company builds data centers and leases them to tech companies on terms of 15 years or more. The leases are “take or pay,” meaning tenants pay whether or not they use the space. One of its campuses is leased to CoreWeave (CRWV). CoreWeave’s own customer at the site is Meta (META), which Cummins said improves its credit quality.
“There’s a lot of funding mechanisms out there,” he said. The bond market, he added, is “still available for us” at a certain price.
He noted that bank construction loans, project financing and the bond market remain available, although higher Treasury yields and wider credit spreads have increased borrowing costs.
“I think we’ll have a higher credit quality tenant,” Cummins said, referring to the capacity still awaiting financing. “But interest rates have also went [gone] up, right? Treasuries have [gone] went up, everything went up, spreads went up.”
Applied Digital Is Focused On ‘Investment-Grade’ Hyperscalers
Since signing CoreWeave, Cummins said Applied Digital has focused on four or five large cloud companies with investment-grade credit, meaning their debt is rated as low risk. Cummins said the tenants behind the capacity it still needs to finance are rated AA or better. That should make lenders more willing to fund the projects.
The company has about $20 billion in contracted revenue across its three newer campuses: Polaris Forge 3 in North Dakota, as well as Delta Forge 1 and 2.
“The big risk is delivering on time,” he said, adding that Applied Digital has delivered projects on schedule and within budget.
APLD Sees More Capacity Coming Online, Backs 2030 Target
Cummins said demand from current and potential customers remains “extremely robust” and that pricing power “has been robust.” He described the current worry about AI infrastructure as the “third wave” of jitters he has seen since the industry began.
He added that Applied Digital has turned on 250 MW of capacity over the past 12 months and expects to bring at least another 600 MW online over the next year, Cummins said.
According to him, the company is also on track to meet its target of reaching 3.5 GW to 4 GW of capacity by 2030, provided demand holds up. “As long as we have the demand, I’m comfortable with that target,” Cummins said.
CEO Sees Potential Consolidation Opportunities In AI Infrastructure
Cummins also said Applied Digital has seen troubled or stalled data center projects come its way, potentially creating opportunities for consolidation. The company is not aggressively pursuing acquisitions, however, because its existing development pipeline offers substantial organic growth.
“It’s been hard for me to look aggressively at consolidation because the organic growth is just so high,” he said.
APLD stock has fallen around 30% this year and over 50% in the last 12 months.
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