Applied Digital (APLD, Financial) plunged 8.6% on Friday after a Schedule 13G filing revealed hyperscaler CoreWeave (CRWV, Financial) sold its entire stake in the data-center operator, trimming its beneficial ownership to 0.0%.
The exit came despite Applied Digital's recent announcement of two 15-year lease agreements with CoreWeave—deals projected to generate roughly $7 billion in revenue over their lifetimes—and the issuance of a warrant on May 28 allowing CoreWeave to buy up to 13,062,521 APLD shares at $7.19 each. In contrast, CoreWeave shares rose about 3% on the day, reflecting investor confidence in its standalone growth trajectory.
The news underscores the complex dynamics between landlord-operators and large-scale cloud tenants: while the leases cement Applied Digital's role in the AI-driven data-center boom, CoreWeave's stake sale suggests it may be reallocating capital toward direct infrastructure spending or other partnerships. Applied Digital hasn't disclosed whether any of CoreWeave's warrant shares were exercised prior to the divestiture, leaving open questions about potential dilution or future share issuances.
Why It Matters: The swift unwinding of a major tenant's equity position can rattle investor sentiment, even when long-term contracts remain intact—raising debate over the balance between partnership revenue and share-price stability.
