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APLD Stock Soars 272% in a Year: Will the Momentum Continue?
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Key Takeaways
APLD shares surged 272% in 12 months, outperforming RIOT, EQIX and the broader Finance sector.
Execution on AI campus leases and timely financing remain critical to APLD's growth outlook.
Heavy debt, low-margin fit-outs and the reliance on key tenants pose near-term risks to APLD's earnings.
Applied Digital (APLD - Free Report) shares have rocketed 272% in the trailing 12-months, outperforming the Zacks Finance sector’s appreciation of 11.8%. APLD has also outperformed peers, including Riot Platforms (RIOT - Free Report) and Equinix (EQIX - Free Report) . While RIOT shares have appreciated 39.1%, EQIX has dropped 23.2% over the same timeframe. However, with large AI campuses ramping and financing still in motion, APLD’s quarterly results are likely to be lumpy before recurring lease revenue scales. This is expected to remain an overhang on the stock in the near term.
Applied Digital is transitioning from low-margin tenant fit-outs to long-duration leases. Lease commencements at Forge 1 in late 2025, full-phase occupancy as the second and third buildings add capacity in mid-2026 and 2027, respectively, and timely completion of asset-level financing for Forge 1 are key catalysts. New or expanded hyperscaler agreements, including the signed investment-grade lease at Polaris Forge 2 and potential follow-ons, would add incremental visibility.
Operating execution against shortened 12-14 month build timelines, coupled with structured capital from Macquarie facilities, would strengthen confidence in APLD’s rental cash-flow transition. However, until lease revenue recognition accelerates, earnings growth is expected to remain muted.
The Zacks Consensus Estimate for second-quarter fiscal 2026 loss is pegged at 10 cents per share. APLD reported a loss of 66 cents per share in the year-ago quarter. For fiscal 2026, the consensus mark is pegged at a loss of 31 cents per share, unchanged over the past 30 days and much narrower than the loss of 80 cents reported in fiscal 2025. The consensus trend reflects project-transition costs and timing.
APLD trades at 21.4X forward 12-month sales versus 9.07X for the broader sector, and 5.3X for the S&P 500. This premium assumes on-time buildout and smooth leasing ramps. Any slippage in schedules, financing, or tenant contributions could compress multiples toward group norms.
Applied Digital is also trading at a premium compared with peers, including Riot Platforms and Equinix, shares of which are trading at 7.63X and 7.27X, respectively.
Execution & Concentration Risks to Hurt APLD Stock
Applied Digital’s near-term revenues are dominated by low-margin fit-out work while cash outflows stay heavy. The company ended the latest quarter with roughly $114 million in cash and $687 million of total debt, with additional preferred capital drawn subsequently.
Customer concentration is significant. CoreWeave (CRWV - Free Report) is the sole tenant across the fully leased 400 MW at Polaris Forge 1, while the legacy hosting business also hinges on one customer. Delays, counterparty risks, or financing gaps would pressure earnings momentum and sentiment.
Applied Digital is also facing stiff competition from Riot Platforms and Equinix. Equinix, which operates a global interconnection footprint with more than 260 data centers and an xScale portfolio aimed at hyperscalers, offers a diversified approach to power-dense infrastructure demand. Riot Platforms, meanwhile, is expanding beyond crypto mining into HPC, planning more than 1 GW of capacity to serve AI workloads.
Image: Bigstock
APLD Stock Soars 272% in a Year: Will the Momentum Continue?
Key Takeaways
Applied Digital (APLD - Free Report) shares have rocketed 272% in the trailing 12-months, outperforming the Zacks Finance sector’s appreciation of 11.8%. APLD has also outperformed peers, including Riot Platforms (RIOT - Free Report) and Equinix (EQIX - Free Report) . While RIOT shares have appreciated 39.1%, EQIX has dropped 23.2% over the same timeframe. However, with large AI campuses ramping and financing still in motion, APLD’s quarterly results are likely to be lumpy before recurring lease revenue scales. This is expected to remain an overhang on the stock in the near term.
Applied Digital is transitioning from low-margin tenant fit-outs to long-duration leases. Lease commencements at Forge 1 in late 2025, full-phase occupancy as the second and third buildings add capacity in mid-2026 and 2027, respectively, and timely completion of asset-level financing for Forge 1 are key catalysts. New or expanded hyperscaler agreements, including the signed investment-grade lease at Polaris Forge 2 and potential follow-ons, would add incremental visibility.
Operating execution against shortened 12-14 month build timelines, coupled with structured capital from Macquarie facilities, would strengthen confidence in APLD’s rental cash-flow transition. However, until lease revenue recognition accelerates, earnings growth is expected to remain muted.
The Zacks Consensus Estimate for second-quarter fiscal 2026 loss is pegged at 10 cents per share. APLD reported a loss of 66 cents per share in the year-ago quarter. For fiscal 2026, the consensus mark is pegged at a loss of 31 cents per share, unchanged over the past 30 days and much narrower than the loss of 80 cents reported in fiscal 2025. The consensus trend reflects project-transition costs and timing.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
APLD’s Valuation Stretched
APLD trades at 21.4X forward 12-month sales versus 9.07X for the broader sector, and 5.3X for the S&P 500. This premium assumes on-time buildout and smooth leasing ramps. Any slippage in schedules, financing, or tenant contributions could compress multiples toward group norms.
Applied Digital is also trading at a premium compared with peers, including Riot Platforms and Equinix, shares of which are trading at 7.63X and 7.27X, respectively.
Execution & Concentration Risks to Hurt APLD Stock
Applied Digital’s near-term revenues are dominated by low-margin fit-out work while cash outflows stay heavy. The company ended the latest quarter with roughly $114 million in cash and $687 million of total debt, with additional preferred capital drawn subsequently.
Customer concentration is significant. CoreWeave (CRWV - Free Report) is the sole tenant across the fully leased 400 MW at Polaris Forge 1, while the legacy hosting business also hinges on one customer. Delays, counterparty risks, or financing gaps would pressure earnings momentum and sentiment.
Applied Digital is also facing stiff competition from Riot Platforms and Equinix. Equinix, which operates a global interconnection footprint with more than 260 data centers and an xScale portfolio aimed at hyperscalers, offers a diversified approach to power-dense infrastructure demand. Riot Platforms, meanwhile, is expanding beyond crypto mining into HPC, planning more than 1 GW of capacity to serve AI workloads.
Zacks Rank
Applied Digital currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.