Applied Digital (APLD.O) faced a significant setback as it announced on Friday that revenue from its Ellendale data center hosting facility would be severely impacted in the current quarter due to an ongoing power outage.
This announcement led to a sharp decline of more than 10% in the company’s shares during extended trading.
The troubles began for the facility on January 18, 2024, when it started experiencing a power outage, culminating in a complete shutdown by January 19, as stated by the data center services provider in a filing with the Securities and Exchange Commission.
Applied Digital elucidated on the situation, noting, “This complete power outage is currently ongoing as our electricity provider is performing upgrades to ensure stability of our electrical supply.”
The company further acknowledged that the revenue derived from this facility would suffer a substantial blow due to the outage for the quarter ending on February 29.
However, it reassured stakeholders by expressing optimism about the facility coming back online later this month.
This development adds to Applied Digital’s recent challenges, as it had already revised down its full-year expectations in the previous month. The company attributed the adjustment to the scarcity of critical networking components, primarily manufactured by chipmaker Nvidia (NVDA.O).
As Applied Digital grapples with the aftermath of the power outage and other industry-related hurdles, investors remain watchful for signs of recovery and resilience in the company’s operational strategies.