Applied Digital Faces Execution Risks Amid Explosive Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy APLD?
Source: NASDAQ.COM
- Market Reaction: Applied Digital (NASDAQ: APLD) is building a robust AI infrastructure, yet the market expresses concerns over the gap between its explosive growth and real execution risks, potentially leading to stock price volatility.
- Investor Caution: Despite optimistic market expectations for Applied Digital's future, The Motley Fool's analyst team has not included it in their current list of top investment stocks, indicating a cautious outlook on its performance.
- Historical Comparisons: Historically, companies like Netflix and Nvidia featured on The Motley Fool's recommendation list have yielded returns of 502,837% and 1,241,433% for early investors, underscoring the importance of stock selection.
- Return on Investment: The Motley Fool's Stock Advisor program boasts a total average return of 977%, significantly outperforming the S&P 500's 200%, highlighting the need for careful assessment of potential risks and rewards in investment choices.
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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: 34.980
Low
36.00
Averages
52.22
High
99.00
Current: 34.980
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.
Growth Prospects for Applied Digital and Western Digital
- Applied Digital Revenue Surge: Applied Digital's revenue soared by 139% year-over-year in Q3 FY2026 to $126.6 million, and with the completion of its data center construction, revenue is expected to accelerate further, reflecting strong market demand and future growth potential.
- Long-term Contract Security: Applied Digital has secured a 15-year contract with CoreWeave and another hyperscaler, amounting to a $16 billion revenue pipeline, ensuring a stable income source in the AI data center sector and enhancing its market competitiveness.
- Strong Demand for Western Digital: Western Digital's stock surged 123% in 2026, primarily driven by robust demand for hard disk drives in AI data centers, which is expected to continue facing supply shortages in the coming years, propelling significant earnings growth for the company.
- Upgraded Earnings Expectations: Western Digital anticipates earnings per share to jump from last fiscal year's $4.93 to $19.09, and if it trades at a 32x earnings multiple, the stock could reach $611, indicating a promising outlook for investors in tech stocks.
See More
Investment Opportunities in High-Growth Stocks
- Applied Digital Growth: Applied Digital's revenue surged by 139% year-over-year in Q3 FY2026, reaching $126.6 million, driven by robust demand for AI data centers, with expectations for further acceleration in revenue growth, highlighting its competitive edge in a rapidly evolving market.
- Long-Term Contract Revenue: The company has secured a 15-year contract with CoreWeave and another hyperscaler, projected to generate $16 billion in lease revenue, establishing a solid foundation for long-term financial stability.
- Western Digital Market Demand: Western Digital's hard disk drives are in high demand in AI data centers, leading to a 123% surge in stock price in 2026, with expectations of continued price increases due to supply shortages, further enhancing the company's profitability.
- Earnings Forecast Improvement: Western Digital anticipates earnings per share to jump from $4.93 last fiscal year to $19.09, and if it trades at a 32x earnings multiple, the stock could reach $611, representing a potential 57% upside, making it an attractive buy for investors.
See More
Aschenbrenner's AI Investment Strategy
- Fund Growth: Aschenbrenner's venture fund, Situational Awareness, manages $5.5 billion as of Q1, holding 24 stocks primarily focused on AI infrastructure, indicating a strategic foresight in the impending AI revolution.
- Bloom Energy's Strong Performance: The fund's largest investment, Bloom Energy, has seen a 150% stock price increase this year, as the company leverages solid oxide fuel cells to provide reliable power for data centers, capitalizing on new opportunities presented by AI.
- Diverse Portfolio: Situational Awareness also holds stocks like Lumentum and CoreWeave, which have risen 143% and 63% respectively, providing essential technologies for data centers and cloud computing, showcasing Aschenbrenner's deep understanding and investment acumen in AI-related companies.
- Industry Transformation Trend: Companies like Core Scientific and Iren are shifting from cryptocurrency mining to AI development, with Iren's stock soaring 772% over the past year, reflecting strong market demand for AI infrastructure and investor confidence in this transition.
See More
Aschenbrenner's AI Investment Fund Surges
- Fund Growth Surge: Aschenbrenner's Situational Awareness fund has skyrocketed from $250 million at its 2024 inception to $5.5 billion, indicating strong market demand for AI investments and solidifying its leadership in the AI sector.
- Stock Performance Excellence: The fund's portfolio includes Bloom Energy, which is up 150%, Lumentum at 143%, and CoreWeave at 63%, all significantly outperforming the S&P 500, reflecting the robust growth potential of AI-related stocks.
- Strategic Investment Focus: Situational Awareness concentrates on AI-supporting infrastructure companies like Core Scientific and Applied Digital, which are pivoting from cryptocurrency to AI development, highlighting the rapidly increasing demand for AI infrastructure in the market.
- Optimistic Market Outlook: As AI technology continues to evolve, Aschenbrenner's investment strategy not only capitalizes on current market trends but also lays the groundwork for future growth, likely attracting more investors to explore potential opportunities in the AI sector.
See More
Applied Digital Faces Growth vs. Execution Risk Challenge
- Market Reaction: Applied Digital's stock price rose 12.09% on April 17, 2026, indicating market recognition of its AI infrastructure potential, yet revealing investor concerns about execution risks.
- Tension Between Growth and Risk: While the company demonstrates strong growth in the AI sector, market reactions suggest investors are weighing the gap between rapid growth and actual execution capabilities, which could influence future investment decisions.
- Investor Sentiment: The current market environment may view Applied Digital's pullback as either a significant opportunity or a warning sign, prompting investors to closely monitor the company's actual progress in AI infrastructure development.
- Future Outlook: As demand for AI infrastructure continues to rise, Applied Digital's performance will be a key factor in determining its long-term success, necessitating investor assessments of its competitive position and execution capabilities.
See More
Applied Digital Faces Execution Risks Amid Explosive Growth
- Market Reaction: Applied Digital (NASDAQ: APLD) is building a robust AI infrastructure, yet the market expresses concerns over the gap between its explosive growth and real execution risks, potentially leading to stock price volatility.
- Investor Caution: Despite optimistic market expectations for Applied Digital's future, The Motley Fool's analyst team has not included it in their current list of top investment stocks, indicating a cautious outlook on its performance.
- Historical Comparisons: Historically, companies like Netflix and Nvidia featured on The Motley Fool's recommendation list have yielded returns of 502,837% and 1,241,433% for early investors, underscoring the importance of stock selection.
- Return on Investment: The Motley Fool's Stock Advisor program boasts a total average return of 977%, significantly outperforming the S&P 500's 200%, highlighting the need for careful assessment of potential risks and rewards in investment choices.
See More
Growth Prospects for Applied Digital and Western Digital
- Applied Digital Revenue Surge: Applied Digital's revenue soared by 139% year-over-year in Q3 FY2026 to $126.6 million, and with the completion of its data center construction, revenue is expected to accelerate further, reflecting strong market demand and future growth potential.
- Long-term Contract Security: Applied Digital has secured a 15-year contract with CoreWeave and another hyperscaler, amounting to a $16 billion revenue pipeline, ensuring a stable income source in the AI data center sector and enhancing its market competitiveness.
- Strong Demand for Western Digital: Western Digital's stock surged 123% in 2026, primarily driven by robust demand for hard disk drives in AI data centers, which is expected to continue facing supply shortages in the coming years, propelling significant earnings growth for the company.
- Upgraded Earnings Expectations: Western Digital anticipates earnings per share to jump from last fiscal year's $4.93 to $19.09, and if it trades at a 32x earnings multiple, the stock could reach $611, indicating a promising outlook for investors in tech stocks.
See More
Investment Opportunities in High-Growth Stocks
- Applied Digital Growth: Applied Digital's revenue surged by 139% year-over-year in Q3 FY2026, reaching $126.6 million, driven by robust demand for AI data centers, with expectations for further acceleration in revenue growth, highlighting its competitive edge in a rapidly evolving market.
- Long-Term Contract Revenue: The company has secured a 15-year contract with CoreWeave and another hyperscaler, projected to generate $16 billion in lease revenue, establishing a solid foundation for long-term financial stability.
- Western Digital Market Demand: Western Digital's hard disk drives are in high demand in AI data centers, leading to a 123% surge in stock price in 2026, with expectations of continued price increases due to supply shortages, further enhancing the company's profitability.
- Earnings Forecast Improvement: Western Digital anticipates earnings per share to jump from $4.93 last fiscal year to $19.09, and if it trades at a 32x earnings multiple, the stock could reach $611, representing a potential 57% upside, making it an attractive buy for investors.
See More
Aschenbrenner's AI Investment Strategy
- Fund Growth: Aschenbrenner's venture fund, Situational Awareness, manages $5.5 billion as of Q1, holding 24 stocks primarily focused on AI infrastructure, indicating a strategic foresight in the impending AI revolution.
- Bloom Energy's Strong Performance: The fund's largest investment, Bloom Energy, has seen a 150% stock price increase this year, as the company leverages solid oxide fuel cells to provide reliable power for data centers, capitalizing on new opportunities presented by AI.
- Diverse Portfolio: Situational Awareness also holds stocks like Lumentum and CoreWeave, which have risen 143% and 63% respectively, providing essential technologies for data centers and cloud computing, showcasing Aschenbrenner's deep understanding and investment acumen in AI-related companies.
- Industry Transformation Trend: Companies like Core Scientific and Iren are shifting from cryptocurrency mining to AI development, with Iren's stock soaring 772% over the past year, reflecting strong market demand for AI infrastructure and investor confidence in this transition.
See More
Aschenbrenner's AI Investment Fund Surges
- Fund Growth Surge: Aschenbrenner's Situational Awareness fund has skyrocketed from $250 million at its 2024 inception to $5.5 billion, indicating strong market demand for AI investments and solidifying its leadership in the AI sector.
- Stock Performance Excellence: The fund's portfolio includes Bloom Energy, which is up 150%, Lumentum at 143%, and CoreWeave at 63%, all significantly outperforming the S&P 500, reflecting the robust growth potential of AI-related stocks.
- Strategic Investment Focus: Situational Awareness concentrates on AI-supporting infrastructure companies like Core Scientific and Applied Digital, which are pivoting from cryptocurrency to AI development, highlighting the rapidly increasing demand for AI infrastructure in the market.
- Optimistic Market Outlook: As AI technology continues to evolve, Aschenbrenner's investment strategy not only capitalizes on current market trends but also lays the groundwork for future growth, likely attracting more investors to explore potential opportunities in the AI sector.
See More
Applied Digital Faces Growth vs. Execution Risk Challenge
- Market Reaction: Applied Digital's stock price rose 12.09% on April 17, 2026, indicating market recognition of its AI infrastructure potential, yet revealing investor concerns about execution risks.
- Tension Between Growth and Risk: While the company demonstrates strong growth in the AI sector, market reactions suggest investors are weighing the gap between rapid growth and actual execution capabilities, which could influence future investment decisions.
- Investor Sentiment: The current market environment may view Applied Digital's pullback as either a significant opportunity or a warning sign, prompting investors to closely monitor the company's actual progress in AI infrastructure development.
- Future Outlook: As demand for AI infrastructure continues to rise, Applied Digital's performance will be a key factor in determining its long-term success, necessitating investor assessments of its competitive position and execution capabilities.
See More
Applied Digital Faces Execution Risks Amid Explosive Growth
- Market Reaction: Applied Digital (NASDAQ: APLD) is building a robust AI infrastructure, yet the market expresses concerns over the gap between its explosive growth and real execution risks, potentially leading to stock price volatility.
- Investor Caution: Despite optimistic market expectations for Applied Digital's future, The Motley Fool's analyst team has not included it in their current list of top investment stocks, indicating a cautious outlook on its performance.
- Historical Comparisons: Historically, companies like Netflix and Nvidia featured on The Motley Fool's recommendation list have yielded returns of 502,837% and 1,241,433% for early investors, underscoring the importance of stock selection.
- Return on Investment: The Motley Fool's Stock Advisor program boasts a total average return of 977%, significantly outperforming the S&P 500's 200%, highlighting the need for careful assessment of potential risks and rewards in investment choices.
See More
