Applied Digital (APLD) surged 16.5% after securing a $100M development loan from Macquarie Group for AI data center expansion. The rebound follows a sharp 17.5% decline earlier due to debt concerns. The company holds $687M in debt against just $74M in cash. Investors appeared to overlook previous worries, focusing on growth.

Micron Technology (NASDAQ:MU) reported strong fiscal first-quarter results, fueling Applied Digital’s rebound. Micron’s guidance indicated robust AI memory demand surpassing supply through 2026, dispelling fears of an AI bubble burst. Applied Digital’s rally came on the heels of securing a $100M development loan for new data center campuses.

Applied Digital had faced concerns over rising debt levels from aggressive buildouts of AI data centers. The company reported $687M in debt against $74M in cash and issued $2.35B in senior notes in November. The sector-wide context raised alarms, with hyperscalers issuing $121B in bonds in the third quarter for AI infrastructure expansion.

The market’s concerns extended to Applied Digital’s leverage and execution risks, leading to a 17% plunge. The rebound was fueled by Micron’s earnings, confirming strong AI demand. While the funding supports growth, it doesn’t reduce the company’s risk profile, expanding exposure to potential downturns in AI infrastructure spending.

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Read more at Yahoo Finance: Everyone Loves Applied Digital Again. Here’s Why You Should Remain Skeptical