Applied Digital Stock Soars 215% in 2025 Amid AI Infrastructure Boom
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 04 2026
0mins
Should l Buy APLD?
Source: Fool
- Earnings Beat: Applied Digital reported a remarkable revenue of $64 million in Q1 FY2026, an 84% year-over-year increase that surpassed the $50 million consensus estimate, primarily driven by a $26.3 million contract with CoreWeave for data center fit-out, showcasing the company's robust growth in the AI infrastructure sector.
- Long-Term Contract Advantage: The 15-year lease agreement with CoreWeave for 400 MW of data center capacity is expected to generate up to $11 billion in revenue, further solidifying Applied Digital's leadership position in the high-performance computing market.
- Future Growth Expectations: Analysts forecast that Applied Digital's revenue for Q2 FY2026 could exceed the $82.2 million estimate, reflecting strong demand for AI factory construction and data center expansion, which could trigger a rally in its stock price.
- Market Valuation Analysis: Despite trading at nearly 33 times sales, indicating a high valuation, analysts believe that Applied Digital's growth potential and strong revenue pipeline justify this valuation, with market cap projections rising from $7.9 billion to $9.7 billion, a 44% increase.
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Analyst Views on APLD
Wall Street analysts forecast APLD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for APLD is 49.18 USD with a low forecast of 36.00 USD and a high forecast of 99.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
11 Buy
0 Hold
0 Sell
Strong Buy
Current: 27.845
Low
36.00
Averages
49.18
High
99.00
Current: 27.845
Low
36.00
Averages
49.18
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.
Applied Digital's Stock Soars Amid AI Demand but Faces Significant Risks
- Significant Sales Growth: In its fiscal Q2 2026, Applied Digital reported a 250% surge in sales to nearly $127 million, highlighting its strong performance amid soaring demand for AI infrastructure; however, the rapid sales growth has not translated into profitability, as the company faces high expenditure pressures.
- Leasing Agreement Potential: The multi-year leasing agreements with CoreWeave are projected to generate up to $16 billion in revenue over 15 years, providing a stable cash flow source for the company, but this also hinges on the continued growth of the AI market.
- Expenditure and Loss Issues: Despite the significant sales increase, Applied Digital's total expenses rose by 230% in the same quarter to nearly $158 million, resulting in a non-GAAP diluted loss of $0.07 per share, reflecting severe challenges in achieving profitability.
- Overvaluation Concerns: With a price-to-sales ratio of about 31, significantly higher than the tech sector average of 9, it indicates that investors are overpaying for an AI company that has yet to achieve profitability, suggesting potential downward pressure on the stock price and caution for investors considering holding the stock.
See More
Applied Digital Faces Three Major Risks Amid Data Center Boom
- Debt Surge Risk: Applied Digital's debt skyrocketed from $44 million in Q1 FY2024 to $2.6 billion by November 2025, with a debt-to-equity ratio exceeding 125%, significantly increasing execution risks, especially given the company's $125 million loss over the past 12 months.
- Customer Concentration Issue: Applied Digital's HPC Hosting Business relies almost entirely on CoreWeave for all current and future revenue, creating a dangerous dependency that leaves the company with little negotiating power; if CoreWeave opts to build its own capacity or switch partners, Applied Digital faces substantial risks.
- Lease Revenue Uncertainty: The company anticipates generating $16 billion in revenue from leases over 15 years, but CoreWeave can terminate the lease penalty-free if construction is not completed on time, undermining the perceived security of this revenue stream and increasing investor uncertainty.
- Market Opportunity vs. Risks: While there is bullish sentiment around Applied Digital's prospects, the company faces significant challenges in managing debt, maintaining its relationship with CoreWeave, and completing construction on schedule, necessitating careful risk assessment by investors.
See More
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- Centene Guidance Miss: Centene's full-year revenue guidance of $186.5 billion to $190.5 billion fell short of the $194.1 billion consensus, leading to a 5% drop in shares, indicating pressure in the health insurance sector.
- AI Infrastructure Stocks Surge: Companies linked to AI infrastructure, such as Lumen Technologies and Applied Digital, saw stock prices rise by at least 20%, reflecting a recovery in investor confidence after a week of selling, potentially signaling a shift in market sentiment.
- Viasat Earnings Beat: Viasat reported adjusted earnings of $0.79 per share for the third quarter, up from $0.11 a year earlier, with shares gaining about 10%, as the company anticipates double-digit operating cash flow growth in 2026, showcasing a strong business outlook.
- Roblox Optimistic Forecast: Roblox expects full-year bookings between $8.28 billion and $8.55 billion, exceeding the $7.87 billion consensus, resulting in a 12% stock increase, indicating robust performance in the online gaming market and future growth potential.
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U.S. Stocks Rise as Dow Jones Gains Over 700 Points
- Dow Jones Performance: The Dow Jones index rose over 700 points on Friday, indicating a strong market rebound that reflects investor optimism about economic recovery, which could further drive consumer spending and investment.
- Strategic Shares Surge: Strategy shares jumped 14.1% to $122.56 on Friday, signaling a positive market outlook for the company and potentially attracting more investor interest in its future growth prospects.
- Overall Market Trend: The overall rise in U.S. stocks suggests a restoration of investor confidence, which may lead to increased capital inflows into the stock market, thereby promoting economic growth and corporate earnings.
- Market Data Source: This market update is provided by Benzinga APIs, highlighting improved market information transparency that aids investors in making more informed decisions.
See More
Applied Digital Board Member Sells Shares Amid AI Boom
- Transaction Overview: Board member Chuck Hastings sold 45,987 shares of Applied Digital on January 29, 2026, at $38.57 per share, totaling $1.8 million, indicating a liquidity realization following a significant stock price surge.
- Holding Analysis: Post-sale, Hastings retains 388,372 shares valued at approximately $14.8 million, with the shares sold representing 10.59% of his holdings, which is below his recent median of 12.66%, suggesting a declining share base.
- Market Context: The transaction occurred when Applied Digital's stock had appreciated by 399.32% over the past year, reflecting Hastings' decision to capitalize on the stock reaching a 52-week high of $42.27, demonstrating his market timing acumen.
- Company Financial Performance: Applied Digital reported a staggering 250% year-over-year revenue growth in its fiscal second quarter, reaching $126.6 million, despite a net income of -$127.62 million, highlighting robust demand in the AI infrastructure sector.
See More
Applied Digital: The Rise of AI Data Centers
- Surging Market Demand: According to a McKinsey study, total data center expenditures could reach $7 trillion by 2030, with the majority allocated to AI, highlighting a strong demand for high-performance computing infrastructure that Applied Digital is poised to capitalize on.
- Data Center Construction Plans: Applied Digital is building two AI data center campuses, Polaris Forge 1 and Polaris Forge 2, with total capacities of 450 megawatts and 300 megawatts respectively, expected to be completed by 2027, which will significantly enhance the company's revenue potential.
- Lease Agreements Yielding Revenue: The company has signed lease deals with CoreWeave totaling $11 billion over 15 years, along with another unnamed AI company for approximately $5 billion, providing a stable cash flow that supports its growth strategy.
- Stock Surge and Valuation: Over the past 18 months, Applied Digital's stock has surged by 700%, pushing its market cap to $9.5 billion; despite cash flow pressures and reliance on large deals, analysts project revenues of $346 million for fiscal 2026 and $535 million for fiscal 2027.
See More
Applied Digital's Stock Soars Amid AI Demand but Faces Significant Risks
- Significant Sales Growth: In its fiscal Q2 2026, Applied Digital reported a 250% surge in sales to nearly $127 million, highlighting its strong performance amid soaring demand for AI infrastructure; however, the rapid sales growth has not translated into profitability, as the company faces high expenditure pressures.
- Leasing Agreement Potential: The multi-year leasing agreements with CoreWeave are projected to generate up to $16 billion in revenue over 15 years, providing a stable cash flow source for the company, but this also hinges on the continued growth of the AI market.
- Expenditure and Loss Issues: Despite the significant sales increase, Applied Digital's total expenses rose by 230% in the same quarter to nearly $158 million, resulting in a non-GAAP diluted loss of $0.07 per share, reflecting severe challenges in achieving profitability.
- Overvaluation Concerns: With a price-to-sales ratio of about 31, significantly higher than the tech sector average of 9, it indicates that investors are overpaying for an AI company that has yet to achieve profitability, suggesting potential downward pressure on the stock price and caution for investors considering holding the stock.
See More
Applied Digital Faces Three Major Risks Amid Data Center Boom
- Debt Surge Risk: Applied Digital's debt skyrocketed from $44 million in Q1 FY2024 to $2.6 billion by November 2025, with a debt-to-equity ratio exceeding 125%, significantly increasing execution risks, especially given the company's $125 million loss over the past 12 months.
- Customer Concentration Issue: Applied Digital's HPC Hosting Business relies almost entirely on CoreWeave for all current and future revenue, creating a dangerous dependency that leaves the company with little negotiating power; if CoreWeave opts to build its own capacity or switch partners, Applied Digital faces substantial risks.
- Lease Revenue Uncertainty: The company anticipates generating $16 billion in revenue from leases over 15 years, but CoreWeave can terminate the lease penalty-free if construction is not completed on time, undermining the perceived security of this revenue stream and increasing investor uncertainty.
- Market Opportunity vs. Risks: While there is bullish sentiment around Applied Digital's prospects, the company faces significant challenges in managing debt, maintaining its relationship with CoreWeave, and completing construction on schedule, necessitating careful risk assessment by investors.
See More
Health Insurance Stocks Slide, AI Stocks Surge
- Centene Guidance Miss: Centene's full-year revenue guidance of $186.5 billion to $190.5 billion fell short of the $194.1 billion consensus, leading to a 5% drop in shares, indicating pressure in the health insurance sector.
- AI Infrastructure Stocks Surge: Companies linked to AI infrastructure, such as Lumen Technologies and Applied Digital, saw stock prices rise by at least 20%, reflecting a recovery in investor confidence after a week of selling, potentially signaling a shift in market sentiment.
- Viasat Earnings Beat: Viasat reported adjusted earnings of $0.79 per share for the third quarter, up from $0.11 a year earlier, with shares gaining about 10%, as the company anticipates double-digit operating cash flow growth in 2026, showcasing a strong business outlook.
- Roblox Optimistic Forecast: Roblox expects full-year bookings between $8.28 billion and $8.55 billion, exceeding the $7.87 billion consensus, resulting in a 12% stock increase, indicating robust performance in the online gaming market and future growth potential.
See More
U.S. Stocks Rise as Dow Jones Gains Over 700 Points
- Dow Jones Performance: The Dow Jones index rose over 700 points on Friday, indicating a strong market rebound that reflects investor optimism about economic recovery, which could further drive consumer spending and investment.
- Strategic Shares Surge: Strategy shares jumped 14.1% to $122.56 on Friday, signaling a positive market outlook for the company and potentially attracting more investor interest in its future growth prospects.
- Overall Market Trend: The overall rise in U.S. stocks suggests a restoration of investor confidence, which may lead to increased capital inflows into the stock market, thereby promoting economic growth and corporate earnings.
- Market Data Source: This market update is provided by Benzinga APIs, highlighting improved market information transparency that aids investors in making more informed decisions.
See More
Applied Digital Board Member Sells Shares Amid AI Boom
- Transaction Overview: Board member Chuck Hastings sold 45,987 shares of Applied Digital on January 29, 2026, at $38.57 per share, totaling $1.8 million, indicating a liquidity realization following a significant stock price surge.
- Holding Analysis: Post-sale, Hastings retains 388,372 shares valued at approximately $14.8 million, with the shares sold representing 10.59% of his holdings, which is below his recent median of 12.66%, suggesting a declining share base.
- Market Context: The transaction occurred when Applied Digital's stock had appreciated by 399.32% over the past year, reflecting Hastings' decision to capitalize on the stock reaching a 52-week high of $42.27, demonstrating his market timing acumen.
- Company Financial Performance: Applied Digital reported a staggering 250% year-over-year revenue growth in its fiscal second quarter, reaching $126.6 million, despite a net income of -$127.62 million, highlighting robust demand in the AI infrastructure sector.
See More
Applied Digital: The Rise of AI Data Centers
- Surging Market Demand: According to a McKinsey study, total data center expenditures could reach $7 trillion by 2030, with the majority allocated to AI, highlighting a strong demand for high-performance computing infrastructure that Applied Digital is poised to capitalize on.
- Data Center Construction Plans: Applied Digital is building two AI data center campuses, Polaris Forge 1 and Polaris Forge 2, with total capacities of 450 megawatts and 300 megawatts respectively, expected to be completed by 2027, which will significantly enhance the company's revenue potential.
- Lease Agreements Yielding Revenue: The company has signed lease deals with CoreWeave totaling $11 billion over 15 years, along with another unnamed AI company for approximately $5 billion, providing a stable cash flow that supports its growth strategy.
- Stock Surge and Valuation: Over the past 18 months, Applied Digital's stock has surged by 700%, pushing its market cap to $9.5 billion; despite cash flow pressures and reliance on large deals, analysts project revenues of $346 million for fiscal 2026 and $535 million for fiscal 2027.
See More
