APPLIED DIGITAL CORP (APLD) stock plummeted 5.04% in pre-market trading on Wednesday, underperforming the broader market indices. The sharp decline came despite the AI data center company reporting a 51% year-over-year increase in fiscal second-quarter revenue to $63.9 million, exceeding analyst estimates of $62.4 million.

However, APLD's adjusted net loss for the quarter ended November 30 widened to $0.06 per share, compared to a $0.05 loss a year earlier. This missed consensus forecasts of a $0.16 loss per share, raising concerns over the company's profitability and cash burn as it continues its expansion efforts.

While APLD unveiled a perpetual preferred equity funding facility of up to $5 billion from Macquarie Asset Management to support its data center development plans, the market seemed to overlook this positive development. Investors instead focused on the earnings miss and uncertainty over the company's path to profitability, triggering the pre-market sell-off.