Quick Verdict — 2 Minutes
B+
Overall Grade
Conviction 68%
Applied Digital is building the physical infrastructure layer for the AI revolution. With 400MW operational at Polaris Forge 1 (CoreWeave), a $5B hyperscaler lease for Polaris Forge 2, and 430MW Delta Forge 1 under construction, APLD is scaling from $264M in revenue toward a potential 5GW pipeline by 2031. The ChronoScale cloud spinoff adds a pure-play catalyst. At $25.14 with a $45 analyst target, the risk/reward skews positive — but extreme volatility (beta 7.34) and 31% short interest demand disciplined sizing.
Bull Case
- +250% revenue growth — fastest in AI infra sector
- $5B hyperscaler lease secured for Polaris Forge 2 (200MW)
- $1.9B cash — funded for full build-out
- Analyst consensus $45.27 — +80% upside
- ChronoScale spinoff unlocks GPU cloud valuation
Bear Case
- 31.3% short interest — 80M shares short, massive bearish bet
- Beta 7.34 — extreme volatility, can move 10%+ daily
- Negative margins — operating loss -24.5%, net loss -47.4%
- $2.6B debt vs $1.9B cash — leveraged balance sheet
Business Overview
Applied Digital in one sentence: A next-generation data center company that designs, builds, and operates high-performance computing (HPC) facilities optimized for AI/ML workloads, providing GPU cloud services and colocation hosting to hyperscalers and enterprise clients.
2015
Founded (Dallas, TX)
1,030 MW
Total Planned Capacity
Data Center Portfolio
| Facility | Location | Capacity | Tenant | Status |
|---|
| Polaris Forge 1 | Ellendale, ND | 400 MW | CoreWeave |
Phase II Live (100MW) |
| Polaris Forge 2 | Harwood, ND | 200 MW | Major Hyperscaler ($5B lease) |
Q4 2026 Ready |
| Delta Forge 1 | Southern U.S. | 430 MW | Under Negotiation |
Groundbreaking Jan 2026 |
| Future Pipeline | Multiple Sites | 900 MW+ | Hyperscaler Discussions |
2028+ |
Why APLD matters in the AI data center race: The AI training infrastructure market faces an acute capacity shortage. Hyperscalers need hundreds of megawatts of power-dense facilities for GPU clusters. APLD has secured long-term power purchase agreements in low-cost energy states (North Dakota) and delivers facilities at $7-10M per MW — significantly cheaper than major metro builds at $15-20M per MW. Their advantage is speed-to-market and power availability. The strategic goal is 5,000 MW (5 GW) by 2031.
News & Catalysts
CHRONOSCALE SPINOFF: On Feb 15, 2026, APLD announced a Business Combination to spin off its cloud computing division as
ChronoScale Corporation via a merger with Ekso Bionics. APLD retains ~97% ownership. This unlocks a pure-play GPU cloud valuation.
SEC 8-K· Feb 17, 2026
Project financing to complete the 200MW campus. Power substation enters service June 2026, Ready-for-Service October 2026. Anchored by a $5B hyperscaler lease.
Additional 150MW expansion brings PF1 to 250MW operational. Full 400MW expected late 2027.
APLD fell from $42.10 (Jan high) to $25.14 on macro fears (tariffs, DeepSeek narrative, risk-off). Sector-wide, not company-specific — CORZ, IREN, CIFR saw similar declines.
Kentucky Teachers Retirement System added 43,342 shares. Pension funds adding during selloffs signals long-term conviction.
MarketBeat· Mar 2026
Fundamentals
$264M
Revenue (TTM)
+250% YoY
$21.4M
EBITDA
Turning positive
$1.91B
Cash
Well-capitalized
$2.61B
Total Debt
Net debt $695M
Valuation & Key Ratios
| Metric | Value | Interpretation |
|---|
| Market Cap | $7.08B | Mid-cap AI infra |
| EV/Revenue | 31.6x | Premium for infrastructure |
| EV/EBITDA | 389.8x | Priced for massive growth |
| Price/Book | 4.84x | Book $5.19/share |
| Gross Margin | 19.6% | Improving with scale |
| Revenue Growth | +250% | Explosive — CoreWeave driven |
| Analyst Target | $45.27 | +80% upside |
| Consensus | Strong Buy | 11 analysts |
Earnings Beat Streak
| Quarter | EPS Actual | Estimate | Surprise |
|---|
| Q1 2025 | -$0.08 | -$0.10 | Beat $0.02 |
| Q2 2025 | -$0.03 | -$0.21 | Beat $0.18 |
| Q3 2025 | -$0.03 | -$0.16 | Beat $0.13 |
| Q4 2025 | $0.00 | -$0.21 | Beat $0.21 (breakeven) |
Path to profitability is visible: Four consecutive EPS beats with losses narrowing from -$0.08 to breakeven. As PF1 scales to 400MW and PF2 comes online late 2026, recurring lease revenue drives operating leverage. At $1.87M revenue per MW (current run rate), 1,030MW = $1.9B+ annual revenue potential.
Insiders & Institutions
Neutral
Recent Activity
No major sales
Key 13D/G Filings
| Holder | Filing | Change | Signal |
|---|
| Wes Cummins (CEO) | 13D | Unchanged | ~8% stake maintained |
| Vanguard Group | 13G | +89.4% | Nearly doubled |
| BlackRock Inc. | 13G | +175.4% | Massive increase |
| Jane Street Group | 13G | +21.5% | Continued accumulation |
| Hood River Capital | 13G | +45.5% | Aggressive buying |
Institutional signal is unambiguous: Vanguard (+89%), BlackRock (+175%), Hood River (+45%) all increased Q4 2025. CEO Wes Cummins holds an unchanged 13D position. CoreWeave held a 13G that closed June 2025, transitioning from equity stake to pure customer/lease relationship.
Capital Structure & Dilution
Dilution risk is moderate: The $2.15B Polaris Forge 2 financing was project-level debt, not equity dilution. ChronoScale spinoff issues 138.2M new shares to APLD's subsidiary (APLD retains ~97%). Key watch: any new ATM offering or secondary would be a short-term negative, but the current $1.91B cash position reduces the urgency for equity raises.
Short Interest & Options
31.3%
SI / Float
80.3M shares
$29.00
Max Pain (Mar 13)
+15% above
| Metric | Value | Signal |
|---|
| Total Call OI | 15,362 | Calls dominate |
| Total Put OI | 11,429 | Hedging present |
| Call/Put Ratio | 1.34 | Mildly bullish |
| IV (ATM) | ~130% | Extreme vol priced |
Short interest paradox: At 31.3%, APLD has one of the highest SI ratios in AI infrastructure. Yet CTB is only 0.40% — shorts are comfortable, no forced covering. The CTB spiked to ~20% in April 2025 during a previous squeeze. A positive catalyst (new lease, market recovery) could trigger aggressive short covering given 2.46 days-to-cover.
Technical Analysis
37.5
RSI (14)
Near oversold
Supports & Resistances
| Type | Price | Basis | Significance |
|---|
| R3 | $37.71 | VP VAH | Upper value area — distribution zone |
| R2 | $31.05 | EMA 50 | Dynamic resistance to reclaim |
| R1 | $29.00 | Max Pain Mar 13 | Options magnet |
| PRICE | $25.14 | — | — |
| S1 | $24.20 | EMA 200 | Critical LT trend support |
| S2 | $19.00 | Nov 2025 Low | Capitulation zone |
| S3 | $14.34 | VWAP (all-time) | Ultimate support |
Technical structure — 90 days:
- Jan Rally: $24 to $42.10 (+75%) on hyperscaler hype. Volume peaked at 91M+ shares on Jan 8-9.
- Feb-Mar Correction: -40% drawdown driven by macro (DeepSeek + tariffs + risk-off).
- EMA 200 Test: Testing $24.20 — the critical line. A hold maintains the long-term uptrend.
- Bullish RSI Divergence: Price making lower lows while RSI holds — classic reversal signal. Needs volume confirmation.
- OBV Neutral: On-Balance Volume declining since Jan peak, suggesting distribution. Watch for stabilization.
Sector & Peers
| Ticker | Name | MCap | Focus | Corr. |
|---|
| APLD | Applied Digital | $7.08B | HPC DCs + GPU Cloud | — |
| CORZ | Core Scientific | ~$5B | AI/HPC Data Centers | 0.46 |
| NBIS | Nebius Group | ~$8B | AI Infrastructure | 0.44 |
| HUT | Hut 8 Corp | ~$3B | AI + Digital Assets | 0.40 |
| EQIX | Equinix | $92B | Enterprise DCs (REIT) | Low |
APLD vs Equinix: APLD trades at a steep discount to traditional DC REITs like Equinix ($92B on $9B revenue) while offering 250% growth vs Equinix's 8%. If APLD reaches half of Equinix's revenue at similar margins, the $7B valuation is compelling. Key differentiator: purpose-built HPC with direct liquid cooling — a capability legacy DCs lack.
Social Radar — Sentiment
50.7%
Bullish (StockTwits)
Mildly positive
Informed
Discussion Quality
Detailed DD
Community Highlights
Full facility timeline with MW targets and revenue projections. 5,000MW at $1.87M/MW = ~$9.4B revenue potential. 15 likes, highly sourced.
VIX spike to ~30 suggests hedging pressure already peaked. Friday's selloff priced in most fear. "Market first, sector second, stock third" in high-vol. 23 likes.
Social sentiment: APLD's 40,844-watcher community is notably sophisticated — discussions center on MW economics and lease terms, not hype. No pump-and-dump signals detected. The Equinix comparison is a recurring, fundamentally sound bull thesis.
Risk Analysis
Risk Profile: Elevated
High-growth infra with execution risk, extreme beta, and leverage. Mitigated by contracted revenue and institutional backing.
Extreme Beta
Leverage
Execution
Short Pressure
Extreme Volatility — Critical
- Beta 7.34 — 7x market moves
- ATR $2.74 = ~11% daily swings
- $19 to $42 to $25 in 4 months
Leverage & Debt — High
- $2.61B debt vs $1.91B cash
- EV/EBITDA 389x — growth dependent
- Construction overruns could stress balance sheet
Execution Risk — Medium
- 1,030MW across 3 sites simultaneously
- Power grid and permitting dependencies
- Only 205 employees for massive capex
Short Squeeze Risk — Medium
- 31.3% float short — massive directional bet
- CTB 0.40% — shorts comfortable for now
- Catalyst could trigger violent squeeze
Why the price is here: APLD sits at the intersection of a massive AI buildout backed by contracted revenue and a macro environment hostile to high-beta growth. The 31.3% SI reflects execution skepticism, while institutional accumulation (Vanguard +89%, BlackRock +175%) reflects conviction. $25 is the battlefield.
Trade Idea — EMA 200 Bounce
Entry
$24–$25.50
EMA 200 zone
Stop Loss
$21.50
-14% below Nov low
TP2
$38.00
Jan high retest (+52%)
R/R
1 : 1.7
To TP1 (entry $25)
Trade thesis: APLD tests its 200-day EMA after a -40% macro-driven selloff. Fundamentals intact (250% growth, contracted leases, ChronoScale spinoff). Bullish RSI divergence forming. 31% SI means any catalyst triggers aggressive covering. EMA 200 historically acts as strong support for momentum names in secular growth.
Confirmation Signals
- EMA 200 bounce with volume > 20M
- New hyperscaler lease (Delta Forge 1)
- VIX below 25 (risk-on rotation)
- ChronoScale approval / timeline update
Invalidation Signals
- Weekly close below $21.50 on volume
- CoreWeave / hyperscaler contract loss
- Surprise equity offering / ATM
- PF2 construction delays >6 months
Timing & Sizing:
- Horizon: Swing 4–12 weeks
- Catalysts: New lease announcement expected this week, Oracle earnings Tue (AI demand read-through), market stabilization
- Sizing: Max 1.5–2% portfolio — beta 7.34 demands small size
- Scaled entry: 50% now / 50% on confirmed bounce with volume
Overall Assessment
Key Positives
- +250% revenue with contracted hyperscaler leases
- $45.27 analyst target (+80% upside)
- ChronoScale spinoff unlocks GPU cloud value
Key Risks
- Beta 7.34 — unsuitable for risk-averse
- 31.3% SI — significant bearish conviction
- $695M net debt, negative margins
Mindset tip: APLD is a high-conviction, high-volatility trade — not a set-and-forget investment. Size appropriately (1.5–2% max), use EMA 200 as your structural stop, and be prepared for 10%+ daily swings. The thesis is compelling but the path will be turbulent.
MARKET WATCH
Social Radar — Sentiment
Community Highlights
Full facility timeline with MW targets and revenue projections. 5,000MW at $1.87M/MW = ~$9.4B revenue potential. 15 likes, highly sourced.
VIX spike to ~30 suggests hedging pressure already peaked. Friday's selloff priced in most fear. "Market first, sector second, stock third" in high-vol. 23 likes.