AI Data Center Delays Raise New Questions For ORCL, BE And APLD, Says IO Fund — ‘Power, Not Demand, Is Becoming The Bottleneck’

IO Fund highlighted Oracle’s Project Jupiter in New Mexico as a case study, arguing that securing power is no longer enough.

• Oracle issued a force majeure notice to Blue Owl’s STACK Infrastructure in September, allowing it to protect itself contractually if Project Jupiter fails to launch as planned in 2028.
• Analysts at IO Fund argued that the project shows how difficult it can be to turn a signed AI deal into operating capacity.
• The campus still faces hurdles involving its natural-gas supply, air permit and land access, the firm noted.

AI data center projects are facing a new obstacle as developers race to turn surging demand for computing capacity into operational facilities, according to investment research firm IO Fund.

The firm pointed to Oracle Corp.’s (ORCL) Project Jupiter in New Mexico as a case study, arguing that securing power is no longer enough.

Financing, permits, fuel supply and local approvals can all determine whether massive AI campuses actually come online, which could create new risks for companies including Bloom Energy Corp. (BE) and Applied Digital Corp. (APLD), IO Fund stated.

Oracle shares closed 3% higher in Friday’s regular trading session, Bloom Energy shares rose more than 4%, while Applied Digital shares gained over 5%.

ORCL’s Project Jupiter Shows The New Data Center Bottleneck

Oracle issued a force majeure notice to Blue Owl’s STACK Infrastructure on Sept. 24, allowing it to protect itself contractually if Project Jupiter fails to launch as planned in 2028. Oracle later clarified that the notice “do[es] not, by themselves, establish a project delay.”

Project Jupiter is a 2.45-gigawatt campus in New Mexico that forms part of the Stargate AI infrastructure initiative. Analysts at IO Fund argued that the project shows how difficult it can be to turn a signed AI deal into operating capacity.

The campus still faces hurdles involving its natural-gas supply, air permit and land access. A pipeline serving the project has had its expected in-service date pushed to Feb. 1, 2027, while the New Mexico Environment Department’s deadline for the Bloom-powered microgrid permit is Nov. 23.

“The new bottleneck is permission,” IO Fund said, arguing that investors should focus on “permissioned megawatts”, referring to capacity with the power, financing, approvals and customer commitments needed to actually operate.

What The Bottleneck Means For BE And APLD

Bloom Energy’s fuel-cell technology helped Oracle move Project Jupiter away from the grid queue, but the system still depends on natural gas reaching the site and receiving the necessary air permit. The companies expanded their planned capacity to 2.45 GW in April, while Oracle also received a $400 million warrant from Bloom.

Applied Digital faces a different version of the same execution challenge. The company had 1,410 MW of contracted critical IT load across five campuses as of May 31, representing about $36.2 billion in initial contracted revenue, but only $99.8 million of fiscal 2026 revenue came from AI data center base rent.

Long-term leases can protect Applied Digital from utilization risk once facilities are operational, but they do not eliminate construction delays, financing costs, permitting risks or cost overruns, the firm added.

“Power, not demand, is becoming the bottleneck,” IO Fund said, noting that this makes the ability to turn contracted capacity into revenue increasingly important for data center stocks.

What Retail Investors Think Of ORCL Stock

Retail sentiment on Stocktwits around Oracle trended in the ‘extremely bullish’ territory at the time of writing.

ORCL stock is down 27% year-to-date, BE stock is up 233%, while APLD stock is up 4%. The Invesco QQQ Trust (QQQ) is up 22% over the past 12 months, while the iShares U.S. Technology ETF (IYW) is up 35%.

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