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Applied Digital Jumps 47% in a Month: Buy, Sell or Hold the Stock?
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Key Takeaways
Applied Digital shares jumped 46.8% in a month, beating the broader Finance sector's decline.
Strong AI and data center demand, plus the CoreWeave deal, support long-term growth.
Despite gains, rising loss estimates and a rich valuation make APLD a cautious hold.
Applied Digital (APLD - Free Report) shares have appreciated 46.8% in a month, outperforming the broader Zacks Finance sector’s decline of 2.9% and the Zacks Financial – Miscellaneous Services industry’s fall of 8.1%. Since reporting first-quarter fiscal 2026 results on Oct. 9, APLD shares have jumped 22.6%, which can be attributed to solid 84% year-over-year top-line growth and improving prospects.
Year to date (YTD), APLD shares have returned a whopping 369.9%, outperforming the broader sector, industry and close peers, including Riot Platforms (RIOT - Free Report) and Equinix (EQIX - Free Report) . While Riot Platforms’ shares have returned 115.5%, Equinix’s have dropped 12.5%. The broader sector and industry have returned 11.9% and 0.7%, respectively.
APLD Stock Outperforms Sector
Image Source: Zacks Investment Research
The outperformance can be attributed to Applied Digital’s strong prospects. Robust demand for data center infrastructure and growing focus on energy efficiency are noteworthy developments in the data center industry. Strong spending by hyperscalers, which APLD expects to exceed $350 billion in 2025, bodes well for the company’s prospects.
Technically, Applied Digital shares are displaying a bullish trend as they trade above the 50-day and 200-day moving averages.
APLD Trades Above 50-day & 200-day SMAs
Image Source: Zacks Investment Research
So, what should investors do with APLD shares now? Let’s find out.
APLD Benefits From Strong AI Infrastructure Demand
AI needs data centers with high power density, as well as changing power and cooling requirements. Hyperscalers require high-capacity data centers to meet the escalating power needs of AI and GPU-driven applications. These factors bode well for APLD’s future prospects.
Applied Digital’s Data Center Hosting business provides energized infrastructure services to crypto mining customers. The company currently operates sites in Jamestown and Ellendale, ND, with a total hosting capacity of approximately 286 megawatts (MWs). The HPC Hosting business specializes in designing, constructing and operating data centers that are well-equipped to support high-power density applications like high-performance computing (HPC) and AI.
The HPC Hosting business is expected to drive top-line growth over the long term. APLD’s Polaris Forge 1 is purpose-built for AI and HPC. The facility is designed to scale up to 1 gigawatt (GW). The first 100-MW facility is scheduled to be operational in the fourth quarter of 2025, the second 150-MW facility is set to come online in mid-2026, and the third 150-MW facility is planned for 2027. The Polaris Forge 2, supported by funding from Macquarie Equipment Capital, is expected to come online in late 2026 (first building) and reach full capacity in 2027. APLD’s power offering pipeline is expected to exceed 2 GW.
APLD has inked three lease agreements (15-year base term with three five-year options) with CoreWeave (CRWV - Free Report) to deliver 400 MW of critical IT load at Polaris Forge 1. Total anticipated contracted lease revenues from the CoreWeave deal are now expected to be roughly $11 billion. The CoreWeave partnership validates Applied Digital's strategic pivot from cryptocurrency mining to AI-optimized data center infrastructure. This partnership provides strong revenue visibility and effectively de-risks Applied Digital's business model.
APLD’s 2026 Earnings Estimates Revision Goes South
The Zacks Consensus Estimate for APLD’s fiscal 2026 loss is currently pegged at 36 cents per share, which has widened by couple of cents over the past 30 days. The company reported a loss of 80 cents per share in fiscal 2025.
The consensus mark for APLD’s second-quarter fiscal 2026 loss is currently pegged at 11 cents per share, which has widened by a penny over the past 30 days. The company reported a loss of 66 cents per share in the year-ago quarter.
APLD Stock Overvalued
APLD stock is currently overvalued, as suggested by the Value Score of F.
The stock is trading at a premium, with a forward 12-month price/sales of 27.32X compared with the industry’s 3.72X, sector’s 9.26, Riot Platforms’ 10.34X and Equinix’s 8.19X.
APLD Stock’s Valuation
Image Source: Zacks Investment Research
Here’s Why Applied Digital is a Hold Now
Applied Digital is benefiting from the growing demand for AI infrastructure. The CoreWeave lease deal improves revenue visibility, which bodes well for long-term investors. However, the near-term prospect is murky given rising loss estimates. This, along with a stretched valuation, makes the stock a risky bet.
Image: Bigstock
Applied Digital Jumps 47% in a Month: Buy, Sell or Hold the Stock?
Key Takeaways
Applied Digital (APLD - Free Report) shares have appreciated 46.8% in a month, outperforming the broader Zacks Finance sector’s decline of 2.9% and the Zacks Financial – Miscellaneous Services industry’s fall of 8.1%. Since reporting first-quarter fiscal 2026 results on Oct. 9, APLD shares have jumped 22.6%, which can be attributed to solid 84% year-over-year top-line growth and improving prospects.
Year to date (YTD), APLD shares have returned a whopping 369.9%, outperforming the broader sector, industry and close peers, including Riot Platforms (RIOT - Free Report) and Equinix (EQIX - Free Report) . While Riot Platforms’ shares have returned 115.5%, Equinix’s have dropped 12.5%. The broader sector and industry have returned 11.9% and 0.7%, respectively.
APLD Stock Outperforms Sector
Image Source: Zacks Investment Research
The outperformance can be attributed to Applied Digital’s strong prospects. Robust demand for data center infrastructure and growing focus on energy efficiency are noteworthy developments in the data center industry. Strong spending by hyperscalers, which APLD expects to exceed $350 billion in 2025, bodes well for the company’s prospects.
Technically, Applied Digital shares are displaying a bullish trend as they trade above the 50-day and 200-day moving averages.
APLD Trades Above 50-day & 200-day SMAs
Image Source: Zacks Investment Research
So, what should investors do with APLD shares now? Let’s find out.
APLD Benefits From Strong AI Infrastructure Demand
AI needs data centers with high power density, as well as changing power and cooling requirements. Hyperscalers require high-capacity data centers to meet the escalating power needs of AI and GPU-driven applications. These factors bode well for APLD’s future prospects.
Applied Digital’s Data Center Hosting business provides energized infrastructure services to crypto mining customers. The company currently operates sites in Jamestown and Ellendale, ND, with a total hosting capacity of approximately 286 megawatts (MWs). The HPC Hosting business specializes in designing, constructing and operating data centers that are well-equipped to support high-power density applications like high-performance computing (HPC) and AI.
The HPC Hosting business is expected to drive top-line growth over the long term. APLD’s Polaris Forge 1 is purpose-built for AI and HPC. The facility is designed to scale up to 1 gigawatt (GW). The first 100-MW facility is scheduled to be operational in the fourth quarter of 2025, the second 150-MW facility is set to come online in mid-2026, and the third 150-MW facility is planned for 2027. The Polaris Forge 2, supported by funding from Macquarie Equipment Capital, is expected to come online in late 2026 (first building) and reach full capacity in 2027. APLD’s power offering pipeline is expected to exceed 2 GW.
APLD has inked three lease agreements (15-year base term with three five-year options) with CoreWeave (CRWV - Free Report) to deliver 400 MW of critical IT load at Polaris Forge 1. Total anticipated contracted lease revenues from the CoreWeave deal are now expected to be roughly $11 billion. The CoreWeave partnership validates Applied Digital's strategic pivot from cryptocurrency mining to AI-optimized data center infrastructure. This partnership provides strong revenue visibility and effectively de-risks Applied Digital's business model.
APLD’s 2026 Earnings Estimates Revision Goes South
The Zacks Consensus Estimate for APLD’s fiscal 2026 loss is currently pegged at 36 cents per share, which has widened by couple of cents over the past 30 days. The company reported a loss of 80 cents per share in fiscal 2025.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
The consensus mark for APLD’s second-quarter fiscal 2026 loss is currently pegged at 11 cents per share, which has widened by a penny over the past 30 days. The company reported a loss of 66 cents per share in the year-ago quarter.
APLD Stock Overvalued
APLD stock is currently overvalued, as suggested by the Value Score of F.
The stock is trading at a premium, with a forward 12-month price/sales of 27.32X compared with the industry’s 3.72X, sector’s 9.26, Riot Platforms’ 10.34X and Equinix’s 8.19X.
APLD Stock’s Valuation
Image Source: Zacks Investment Research
Here’s Why Applied Digital is a Hold Now
Applied Digital is benefiting from the growing demand for AI infrastructure. The CoreWeave lease deal improves revenue visibility, which bodes well for long-term investors. However, the near-term prospect is murky given rising loss estimates. This, along with a stretched valuation, makes the stock a risky bet.
Applied Digital currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable time to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.