SB Energy Slows $50 Billion IPO as Debt Package Draws Weak Demand

Wells Fargo initiated coverage of Applied Digital Corporation on September 17 with an Overweight rating and a $50 price target, naming the data centre developer a Top Idea. Analyst Eric Luebchow values the roughly 1.4 gigawatts of contracted leases at about $30 a share on a net present value basis, against a pre-call close of $24.39, implying the signed book alone exceeds the share price and the unbuilt pipeline is valued at close to nothing. Wells Fargo puts the base-term value of those take-or-pay leases at about $36 billion, with renewals potentially taking that beyond $86 billion across three decades, and notes more than 70% of contracted megawatts sit directly with Meta and Oracle. The bank argues grid access rather than capital is the scarce input and that Applied Digital secured its utility allocations early, though the backlog pays nothing until built and is funded by up to $5 billion in preferred equity from Macquarie Asset Management drawn in tranches. Risks include concentration in three tenants, with the CoreWeave lease the weakest link despite Meta credit support, and the gap between contracted and delivered capacity ahead of the fiscal first-quarter report in mid-October.

Alibaba unveiled the Zhenwu V900 AI accelerator at its September 22 developer conference, saying it delivers roughly three times the performance of its predecessor and is scheduled for mass production in early 2027. The company also discussed future Qwen models scaling to 5 trillion to 10 trillion parameters and plans to expand global data-center capacity above 20 gigawatts by 2032. Alibaba can run the homegrown chip across its own cloud, models and internal applications, giving it captive demand before broad sales, though the performance claims come from Alibaba itself and mass production is still expected in 2027. For Nvidia, the concern is structural rather than immediate: export restrictions already limit its ability to serve China's highest-end demand, and each generation of domestic hardware that narrows the gap makes it harder for Nvidia to reclaim its old China position if policy changes. Insider Monkey's database showed 97 hedge funds with reportable Alibaba longs in Q2 2026, down from 102 in Q1, while Nvidia had 285 hedge-fund holders, up from 275; Alibaba short interest was about 41.98 million shares as of August 14, roughly 2.0% of public float with around 4.6 days to cover.

Digital Realty announced plans to develop a new cable landing station at its LAX12 data center in Los Angeles in partnership with Assured Communications, a specialist in subsea infrastructure design and delivery. The company said the deployment is expected to strengthen connectivity across its Los Angeles footprint by enabling closer integration between subsea and terrestrial networks, and is designed to give subsea cable operators a turnkey solution for landing and powering their systems. Assured Communications is supporting the design, engineering and construction of the project, according to its founder and chief executive officer, Joel Ogren. The project is currently in development and is expected to begin supporting cables in 2028, providing carriers, cloud providers and content platforms with additional routes between Asia Pacific and North America. Digital Realty President and Chief Executive Officer Andy Power said the development reflects the company's continued focus on expanding its role in supporting global connectivity.