Investment Opportunities in Applied Digital and Reddit
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 21 2026
0mins
Should l Buy APLD?
Source: NASDAQ.COM
- Data Center Opportunity: Applied Digital signed an $11 billion contract with CoreWeave and a $5 billion deal with another unnamed hyperscaler, projecting over $16 billion in lease revenue over the next 15 years, significantly enhancing the company's market position and investor confidence.
- Significant Revenue Growth: Applied Digital's revenue surged 250% year-over-year to $126 million last quarter, partly due to the start of the CoreWeave lease, with management targeting $1 billion in annual operating profit over the next five years, which could substantially increase its market cap.
- Reddit User Growth: Reddit's daily active users increased by 19% year-over-year to 121 million, and despite the stock trading 54% below recent highs, analysts project a 37% annualized earnings-per-share growth over the next several years, indicating the stock's attractiveness at current prices.
- Advertising Revenue Boost: Reddit's advertising revenue surged 70% year-over-year in Q4 2025, driven by increased ad impressions and higher ad pricing, demonstrating that its platform offers high returns on investment for advertisers, further solidifying its competitive edge.
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Analyst Views on APLD
Wall Street analysts forecast APLD stock price to rise
10 Analyst Rating
10 Buy
0 Hold
0 Sell
Strong Buy
Current: 25.140
Low
36.00
Averages
52.22
High
99.00
Current: 25.140
Low
36.00
Averages
52.22
High
99.00
About APLD
Applied Digital Corporation is a designer, builder, and operator of sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking, and blockchain workloads. The Company’s segments include data center hosting (Data Center Hosting Business) and high-performance compute hosting (HPC Hosting Business). The Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. Customer-owned hardware is installed in its facilities, and the Company provides operational and maintenance services for a fixed fee. Its facilities include a 106 megawatt (MW) facility in Jamestown and a 180 MW facility in Ellendale, North Dakota. The HPC Hosting Business designs, builds, and operates data centers which are designed to support high-compute applications using advanced technologies and infrastructures to provide services to customers. Its HPC data center is located at its Polaris Forge 1 campus with 100 MW capacity.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Nvidia's Sale of Applied Digital Stake Raises Concerns
- Portfolio Adjustment: Nvidia sold its 7.7 million shares of Applied Digital, valued at approximately $177 million, during Q4 2025, raising concerns about its investment strategy, although such moves are not uncommon for the company.
- Market Reaction: Following Nvidia's sale, Applied Digital's stock dropped by 10.50% to a current price of $25.14, reflecting negative investor sentiment regarding Nvidia's exit, despite the strong demand for Applied Digital's high-performance computing data centers.
- Financial Performance: In Q2 of fiscal 2026, Applied Digital reported a 250% year-over-year revenue increase, indicating robust demand for its data centers; however, its net loss also rose due to significant investments in capacity expansion, suggesting potential short-term financial strain.
- Future Outlook: While Nvidia's stock sale may be perceived as a negative signal, Applied Digital's expansion plans and strong customer demand are expected to support future cash flows, indicating that investors should remain patient to realize the company's long-term growth potential.
See More
Nvidia's Exit from Applied Digital Raises Investor Concerns
- Nvidia's Stake Sale: Nvidia sold its entire stake in Applied Digital during Q4 2025, previously holding approximately 7.7 million shares valued at about $177 million, raising concerns among investors regarding Applied Digital's future prospects and potentially impacting investor confidence.
- Applied Digital's Growth Momentum: Despite Nvidia's exit, Applied Digital reported a staggering 250% year-over-year revenue increase in Q2 of fiscal 2026, indicating strong demand for its data centers and highlighting the company's robust potential in AI infrastructure development.
- Investor Patience Required: Applied Digital is making significant investments in infrastructure to meet customer demands, and while its net loss has increased, it is expected to generate substantial cash flows once new data centers are operational, necessitating patience from investors.
- Market Competition Analysis: Although Nvidia's share sale may be perceived as a negative signal, analysts believe that Applied Digital still has the potential to establish itself as a top choice for AI processing power, warranting investor attention on its future market performance.
See More
Applied Digital Loses Nvidia as Shareholder Amid AI Expansion Concerns
- Shareholder Change Impact: Applied Digital's loss of Nvidia as a shareholder raises concerns about its future, potentially indicating deeper challenges in its AI infrastructure expansion efforts.
- Market Reaction Tension: With Applied Digital's stock price dropping 10.50% on March 2, 2026, investor confidence in its long-term contracts and aggressive capacity growth is being tested, reflecting market divergence on the company's outlook.
- Tension Between Expectations and Risks: The tension between soaring expectations and narrative risks could significantly impact Applied Digital's future performance, especially in the increasingly competitive AI landscape.
- Potential for Strategic Expansion: Despite the pressure from shareholder changes, Applied Digital may still leverage long-term contracts and capacity growth to drive AI infrastructure expansion, potentially leading to business growth in the future.
See More
Applied Digital Loses Nvidia as Shareholder, Sparks Concerns
- Shareholder Confidence Shaken: Applied Digital's loss of Nvidia as a shareholder raises concerns about its future, particularly in the context of AI infrastructure expansion, potentially impacting investor confidence and stock performance.
- Market Expectations vs. Risks: While the company has positive plans for long-term contracts and capacity growth, the withdrawal of a major shareholder may indicate deeper market risks, prompting investors to carefully assess its future potential.
- Investment Advisory Warning: The Motley Fool's analyst team has not included Applied Digital in their current list of top investment stocks, suggesting a lack of confidence in its future performance, which could hinder its ability to attract new investors.
- Historical Return Comparison: Compared to previously recommended stocks like Netflix and Nvidia, Applied Digital has not garnered sufficient attention, reflecting its relatively weak position in investors' minds, which may affect its future financing and market expansion capabilities.
See More
Applied Digital Corporation Shares Plunge 19.5%
- Significant Stock Decline: Applied Digital Corporation (APLD) experienced a 19.5% drop in February, primarily due to investors reducing their holdings in high-risk tech stocks, reflecting a low tolerance for risk assets and resulting in a market cap decrease to $7 billion.
- Nvidia's Share Sale: Nvidia's decision to sell its 7.7 million shares of Applied Digital exacerbated investor pessimism, leading to widespread concerns about the company's high valuation, with a P/S ratio of 26 compared to the tech sector's average of 8.
- Lack of Profitability: Despite a 250% increase in sales in the most recent quarter, Applied Digital remains unprofitable with a staggering $2.6 billion in debt, highlighting the capital-intensive nature of its business model and increasing investment risks.
- Customer Concentration Risk: The $11 billion, 15-year data center lease agreement with CoreWeave, while seemingly promising, creates a high dependency on a single customer, making the company's financial outlook uncertain, especially if project progress slows.
See More
Investors Lose Faith in Applied Digital After Nvidia's Exit
- Significant Stock Decline: Applied Digital's shares plummeted by 19.5% in February, reflecting a loss of investor confidence in high-risk tech stocks, particularly after Nvidia sold its 7.7 million shares, which intensified market pessimism.
- Lack of Profitability: Despite a remarkable 250% increase in sales in the most recent quarter, Applied Digital remains unprofitable with a staggering debt of $2.6 billion, raising concerns among investors about its future financial health.
- Customer Concentration Risk: The company has signed an $11 billion, 15-year data center lease with CoreWeave, but this heavy reliance on a single customer makes its financial outlook precarious, especially if project progress slows down.
- Eroding Market Confidence: As investor tolerance for AI stocks diminishes, Applied Digital's high price-to-sales ratio of 26 compared to the tech sector's average of about 8 has exacerbated selling pressure on its stock.
See More
Nvidia's Sale of Applied Digital Stake Raises Concerns
- Portfolio Adjustment: Nvidia sold its 7.7 million shares of Applied Digital, valued at approximately $177 million, during Q4 2025, raising concerns about its investment strategy, although such moves are not uncommon for the company.
- Market Reaction: Following Nvidia's sale, Applied Digital's stock dropped by 10.50% to a current price of $25.14, reflecting negative investor sentiment regarding Nvidia's exit, despite the strong demand for Applied Digital's high-performance computing data centers.
- Financial Performance: In Q2 of fiscal 2026, Applied Digital reported a 250% year-over-year revenue increase, indicating robust demand for its data centers; however, its net loss also rose due to significant investments in capacity expansion, suggesting potential short-term financial strain.
- Future Outlook: While Nvidia's stock sale may be perceived as a negative signal, Applied Digital's expansion plans and strong customer demand are expected to support future cash flows, indicating that investors should remain patient to realize the company's long-term growth potential.
See More
Nvidia's Exit from Applied Digital Raises Investor Concerns
- Nvidia's Stake Sale: Nvidia sold its entire stake in Applied Digital during Q4 2025, previously holding approximately 7.7 million shares valued at about $177 million, raising concerns among investors regarding Applied Digital's future prospects and potentially impacting investor confidence.
- Applied Digital's Growth Momentum: Despite Nvidia's exit, Applied Digital reported a staggering 250% year-over-year revenue increase in Q2 of fiscal 2026, indicating strong demand for its data centers and highlighting the company's robust potential in AI infrastructure development.
- Investor Patience Required: Applied Digital is making significant investments in infrastructure to meet customer demands, and while its net loss has increased, it is expected to generate substantial cash flows once new data centers are operational, necessitating patience from investors.
- Market Competition Analysis: Although Nvidia's share sale may be perceived as a negative signal, analysts believe that Applied Digital still has the potential to establish itself as a top choice for AI processing power, warranting investor attention on its future market performance.
See More
Applied Digital Loses Nvidia as Shareholder Amid AI Expansion Concerns
- Shareholder Change Impact: Applied Digital's loss of Nvidia as a shareholder raises concerns about its future, potentially indicating deeper challenges in its AI infrastructure expansion efforts.
- Market Reaction Tension: With Applied Digital's stock price dropping 10.50% on March 2, 2026, investor confidence in its long-term contracts and aggressive capacity growth is being tested, reflecting market divergence on the company's outlook.
- Tension Between Expectations and Risks: The tension between soaring expectations and narrative risks could significantly impact Applied Digital's future performance, especially in the increasingly competitive AI landscape.
- Potential for Strategic Expansion: Despite the pressure from shareholder changes, Applied Digital may still leverage long-term contracts and capacity growth to drive AI infrastructure expansion, potentially leading to business growth in the future.
See More
Applied Digital Loses Nvidia as Shareholder, Sparks Concerns
- Shareholder Confidence Shaken: Applied Digital's loss of Nvidia as a shareholder raises concerns about its future, particularly in the context of AI infrastructure expansion, potentially impacting investor confidence and stock performance.
- Market Expectations vs. Risks: While the company has positive plans for long-term contracts and capacity growth, the withdrawal of a major shareholder may indicate deeper market risks, prompting investors to carefully assess its future potential.
- Investment Advisory Warning: The Motley Fool's analyst team has not included Applied Digital in their current list of top investment stocks, suggesting a lack of confidence in its future performance, which could hinder its ability to attract new investors.
- Historical Return Comparison: Compared to previously recommended stocks like Netflix and Nvidia, Applied Digital has not garnered sufficient attention, reflecting its relatively weak position in investors' minds, which may affect its future financing and market expansion capabilities.
See More
Applied Digital Corporation Shares Plunge 19.5%
- Significant Stock Decline: Applied Digital Corporation (APLD) experienced a 19.5% drop in February, primarily due to investors reducing their holdings in high-risk tech stocks, reflecting a low tolerance for risk assets and resulting in a market cap decrease to $7 billion.
- Nvidia's Share Sale: Nvidia's decision to sell its 7.7 million shares of Applied Digital exacerbated investor pessimism, leading to widespread concerns about the company's high valuation, with a P/S ratio of 26 compared to the tech sector's average of 8.
- Lack of Profitability: Despite a 250% increase in sales in the most recent quarter, Applied Digital remains unprofitable with a staggering $2.6 billion in debt, highlighting the capital-intensive nature of its business model and increasing investment risks.
- Customer Concentration Risk: The $11 billion, 15-year data center lease agreement with CoreWeave, while seemingly promising, creates a high dependency on a single customer, making the company's financial outlook uncertain, especially if project progress slows.
See More
Investors Lose Faith in Applied Digital After Nvidia's Exit
- Significant Stock Decline: Applied Digital's shares plummeted by 19.5% in February, reflecting a loss of investor confidence in high-risk tech stocks, particularly after Nvidia sold its 7.7 million shares, which intensified market pessimism.
- Lack of Profitability: Despite a remarkable 250% increase in sales in the most recent quarter, Applied Digital remains unprofitable with a staggering debt of $2.6 billion, raising concerns among investors about its future financial health.
- Customer Concentration Risk: The company has signed an $11 billion, 15-year data center lease with CoreWeave, but this heavy reliance on a single customer makes its financial outlook precarious, especially if project progress slows down.
- Eroding Market Confidence: As investor tolerance for AI stocks diminishes, Applied Digital's high price-to-sales ratio of 26 compared to the tech sector's average of about 8 has exacerbated selling pressure on its stock.
See More
