Applied Digital Sinks 7%, IREN Tumbles 13% as Data Center Selloff Broadens Past One Name

Key Points:

• IREN Limited's fiscal 2026 impairment charge of $638.8 million, largely due to older mining equipment, triggered a broad sell-off in AI data center pure-play stocks, with IREN shares dropping 13% midday.
• Despite a 41.1% revenue increase to $707 million and AI Cloud revenue growth, IREN posted a net loss of $702.6 million for fiscal 2026, signaling market concerns about transition costs in the sector.
• Peer companies Applied Digital, TeraWulf, and Core Scientific also saw significant declines of around 7%, despite no new company-specific news, indicating sympathy selling across the capital-intensive AI data center group.
• The Global X Data Center & Digital Infrastructure ETF (DTCR) declined only 1%, showing that broader data center and digital infrastructure investments are less affected than pure-play, capex-heavy operators.
• Investors are advised to monitor IREN's price stabilization as a market tone setter and consider balancing pure-play exposure with broader infrastructure funds to mitigate financing and valuation risks in this volatile sector.