APLD Surges 58% Over Half a Year: Top Three Reasons to Consider Keeping the Stock

Overview of Applied Digital (APLD)

Applied Digital (APLD) specializes in the creation and management of advanced data centers tailored for artificial intelligence, cloud computing, and blockchain applications. The company has strategically shifted its focus toward providing large-scale AI infrastructure, centering its expansion on long-term leasing partnerships with high-credit clients.

Over the last six months, APLD’s stock has surged by 58%, far outperforming the Zacks Finance Miscellaneous Services industry, which saw a 29.7% decline, and the broader Finance sector, which dropped by 1.6%. In comparison, Equinix (EQIX) shares rose 18.4%, while Riot Platforms (RIOT) experienced a 6.2% decrease. This strong performance is largely attributed to APLD’s growing collaborations with major hyperscalers, such as its significant AI infrastructure rollout for CoreWeave (CRWV), and the successful activation of its initial 100-megawatt facility.

APLD’s Recent Stock Performance

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AI Infrastructure Expansion Fuels Revenue Growth

APLD’s operational AI infrastructure is beginning to drive revenue gains. The company recently brought its first 100-megawatt building online at the Polaris Forge 1 campus, initiating lease income under a long-term agreement with CoreWeave. This marks the initial phase of a broader 400-megawatt AI facility for CoreWeave, setting the stage for increasing lease revenues as more buildings become operational. As CoreWeave’s capacity grows in the coming years, APLD anticipates a steady stream of recurring revenue from its infrastructure platform.

Beyond Polaris Forge 1, APLD is expanding its AI infrastructure footprint with Polaris Forge 2 and other development projects. The company has secured a roughly 15-year lease with a U.S.-based, investment-grade hyperscaler for 200 megawatts of AI and high-performance computing capacity at Polaris Forge 2, with phased rollouts starting in 2026. Alongside ongoing development for CoreWeave, these initiatives significantly increase APLD’s contracted pipeline. Advanced negotiations are also underway with another investment-grade hyperscaler for three additional sites, potentially adding 900 megawatts of capacity. Each campus offers expansion potential up to 2 gigawatts, and APLD has outlined a credible path to reach 5 gigawatts of total capacity by the early 2030s.

According to Zacks Consensus Estimates, APLD’s projected revenue for fiscal 2026 is $340.24 million, representing a 57.88% increase year-over-year. The anticipated loss per share for fiscal 2026 has improved by 10 cents over the past month, now expected at 26 cents, compared to a loss of 80 cents the previous year.

Applied Digital Corporation: Price and Analyst Consensus

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Energy Strategy: APLD’s Competitive Advantage

Securing affordable and reliable energy is crucial for large-scale AI infrastructure, and APLD has built its strategy around these factors. The company’s focus on North Dakota provides access to low-cost power, a cool climate, and a favorable regulatory environment, all of which contribute to attractive operating costs for hyperscalers entering long-term leases. These advantages give APLD a cost edge that is difficult for competitors in pricier or more congested markets to match quickly.

APLD is further strengthening its energy ecosystem through strategic partnerships and investments. Collaborating with Babcock and Wilcox Enterprises, APLD is deploying modular power generation, enabling new capacity to come online three to four years faster than traditional methods—an important advantage as power delivery bottlenecks slow down most industry players. Additionally, APLD’s investment in Corintis, a company specializing in advanced direct-to-chip liquid cooling, positions it to better meet the increasing energy and computing demands of next-generation AI workloads.

Valuation: APLD Trades at a Premium

APLD’s stock currently appears overvalued, as indicated by a Value Score of F. The company is trading at a forward price-to-sales (P/S) ratio of 15.74, which is significantly higher than the sector average of 8.94 and the industry average of 2.68. This premium is also notable when compared to peers, with Equinix and Riot Platforms trading at forward P/S multiples of 9 and 8.69, respectively.

This elevated valuation is challenging to justify, given the lengthy timeline for revenue realization and ongoing net losses under GAAP as APLD remains in a capital-intensive growth phase. The 900 megawatts of capacity currently under advanced negotiation are not yet contracted, representing potential rather than guaranteed revenue. Any delays in converting this pipeline into firm contracts could put downward pressure on the stock.

APLD’s Premium Valuation Visualized

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Final Thoughts

APLD has reached a turning point, moving from a company focused on construction to one generating lease revenue from its first operational hyperscaler facility. Its expanding pipeline of contracted projects and early-mover energy advantages make it a credible contender in the long-term AI infrastructure space. However, much of this potential appears to be already reflected in the current share price, and the premium valuation—especially in light of ongoing losses and uncontracted capacity—suggests limited near-term upside.

Investors may wish to maintain their positions and monitor for more favorable entry points, particularly as market fluctuations could present opportunities in 2026. At present, APLD holds a Zacks Rank #3 (Hold). For a full list of today’s Zacks #1 Rank (Strong Buy) stocks, click here.

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Additional Resources

For the latest stock recommendations from Zacks Investment Research, you can download the report "7 Best Stocks for the Next 30 Days" for free. Get your copy here.

• Equinix, Inc. (EQIX): Free Stock Analysis Report
• Riot Platforms, Inc. (RIOT): Free Stock Analysis Report
• Applied Digital Corporation (APLD): Free Stock Analysis Report
• CoreWeave Inc. (CRWV): Free Stock Analysis Report

This article was originally published by Zacks Investment Research.

Zacks Investment Research