Applied Digital Falls 7%, IREN Drops 13% as AI Mining Hardware Impairment Spreads Selloff
Shares of Applied Digital and IREN fell sharply on August 28, with the latter dropping over 13% after reporting a $639 million impairment charge related to obsolete Bitcoin mining hardware. The selloff extended beyond one company as investors reevaluated capex-heavy data center pure plays transitioning from cryptocurrency to AI infrastructure. IREN's fiscal 2026 results showed a net loss of $702.6 million, contrasting with an earlier profit and signaling challenges in its pivot strategy despite rising AI Cloud revenue. Applied Digital also declined by 7%, even though it reported strong contracted lease value and recent financing success. The broader data center ETF (DTCR) dropped only 1%, highlighting the targeted nature of the selloff. The market is reacting to high valuations—Applied Digital trades at a forward P/E of 526x, while IREN sits at 137x—which leaves little room for error when peers report large writedowns. The move reflects investor concerns over transition costs and execution risks in the AI data center sector.
Tickers: $APLD $CORZ $IREN $WULF
Topics: data_center impairment_charge stock_drop