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Is Applied Digital Stock Still a Buy After 141% Surge in 6 Months?
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Key Takeaways
APLD's Polaris Forge 1 campus is backed by a full 400MW CoreWeave commitment, boosting multi-year revenue.
APLD's capital structure supports growth, with preferred equity and project financing in place.
The Zacks Consensus Estimate pegs APLD's fiscal 2026 revenues at $280.9M, up 30.35% year over year.
Applied Digital (APLD - Free Report) shares have appreciated 141.2% in the past six months, outperforming the broader Zacks Finance sector’s increase of 10.7% and the Zacks Financial – Miscellaneous Services industry’s fall of 1.6%. During the same period, Equinix (EQIX - Free Report) has declined 15.5%, while Riot Platforms (RIOT - Free Report) has jumped 50.5%, highlighting APLD’s outsized relative performance within the digital infrastructure space.
The rally reflects rising investor confidence in APLD's shift from a speculative infrastructure developer to a contracted hyperscale data centre operator. The expanded CoreWeave (CRWV - Free Report) lease at Polaris Forge 1 has strengthened long-term revenue visibility, while early progress at Polaris Forge 2 reinforces APLD’s positioning in AI infrastructure.
APLD’s Price Performance
Image Source: Zacks Investment Research
With the stock sharply re-rated, does APLD still offer upside at current levels, or is much of the optimism already priced in? Let’s delve deeper to find out.
Contracted Revenue Visibility Provides Foundation
Applied Digital’s long-term revenue visibility is anchored by its arrangements with CoreWeave, representing $11 billion in contracted lease revenues tied to the full 400-megawatt commitment at Polaris Forge 1. This provides a multi-year outlook as the first 100-megawatt building approaches readiness and transitions into recurring lease revenue. CoreWeave’s engagement for tenant fit-out services also supports near-term activity, helping bridge the period between construction and lease monetisation.
With a substantial portion of capacity already committed under long-duration agreements, APLD is positioned to move toward a more predictable, infrastructure-style revenue mix as additional phases come online. Progress at Polaris Forge 2 extends this visibility beyond the initial campus, reinforcing confidence in APLD’s ability to replicate its contracted model. Once Polaris Forge 1 reaches full operation, the campus is expected to support approximately $500 million in annual net operating income, underscoring the scale of the financial inflection. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $280.9 million, reflecting a 30.35% year-over-year increase.
APLD’s Strategic Positioning in AI Infrastructure
The acceleration of artificial intelligence adoption has triggered an unusually concentrated wave of infrastructure investment, with hyperscalers committing substantial capital toward AI-ready data centers. This shift has elevated demand for developers that can deliver power-dense, purpose-built facilities at speed, rather than traditional colocation capacity. APLD is well-positioned to benefit from this constrained supply environment.
APLD’s active development pipeline spans roughly 4 gigawatts, with 700 megawatts currently under construction, providing meaningful scale relative to its size. APLD has shortened construction timelines to approximately 12–14 months from nearly 24 months, improving alignment with hyperscaler deployment schedules. Beyond its existing CoreWeave relationship, APLD is engaged in discussions with additional hyperscalers for new sites. Progress at Polaris Forge 2 near Harwood, ND, further reinforces this positioning, with the 300-megawatt campus designed to scale toward 1 gigawatt, aligning capacity expansion with long-term AI infrastructure demand.
Financial Structure Supports Expansion
APLD’s capital structure supports expansion while limiting reliance on frequent equity issuance. In October 2025, the company drew $112.5 million from its $5 billion preferred equity facility with Macquarie Asset Management to fund construction at Polaris Forge 1. When combined with project financing, this structure unlocks an estimated $20–25 billion in capital capacity, positioning APLD to advance multiple campuses in parallel.
Project financing for Polaris Forge 1 is expected to close during the second quarter of fiscal 2026 with approximately 70% loan-to-cost ratios. APLD secured $50 million in initial funding from Macquarie Equipment Capital for the $3 billion Polaris Forge 2 development. This financial architecture allows APLD to scale in line with the accelerated deployment timelines required by hyperscale customers building compute capacity for next-generation AI workloads.
For fiscal 2026, the Zacks Consensus Estimate for loss is pegged at 31 cents per share, improving from the year-ago loss of 80 cents per share, with estimates improving 5cents over the past 60 days.
Applied Digital stock trades at a forward 12-month price-to-sales (P/S) of 18.43X, well above the Zacks industry average of 3.35X and the broader sector’s multiple of 9.07X. APLD also commands a premium to peers such as Riot Platforms and Equinix, which trade at P/S multiples of 7.79X and 7.37X, respectively.
While the valuation gap versus Riot Platforms and Equinix appears wide, it reflects APLD’s earlier position in the monetisation cycle. The market is valuing contracted hyperscale demand and future NOI generation rather than current utilisation. As Polaris Forge assets move into operation, revenue recognition is expected to accelerate, supporting the premium valuation.
APLD’s P/S F12M Ratio
Image Source: Zacks Investment Research
Conclusion
APLD’s sharp rally over the past six months reflects a fundamental re-rating driven by improving revenue visibility, scalable AI-focused infrastructure and a capital structure that supports disciplined expansion. While the stock trades at a premium, the valuation is supported by long-duration hyperscale contracts and a clear path toward recurring net operating income as Polaris Forge assets come online. With monetisation still in the early stages, investors can consider buying APLD at current levels.
Image: Bigstock
Is Applied Digital Stock Still a Buy After 141% Surge in 6 Months?
Key Takeaways
Applied Digital (APLD - Free Report) shares have appreciated 141.2% in the past six months, outperforming the broader Zacks Finance sector’s increase of 10.7% and the Zacks Financial – Miscellaneous Services industry’s fall of 1.6%. During the same period, Equinix (EQIX - Free Report) has declined 15.5%, while Riot Platforms (RIOT - Free Report) has jumped 50.5%, highlighting APLD’s outsized relative performance within the digital infrastructure space.
The rally reflects rising investor confidence in APLD's shift from a speculative infrastructure developer to a contracted hyperscale data centre operator. The expanded CoreWeave (CRWV - Free Report) lease at Polaris Forge 1 has strengthened long-term revenue visibility, while early progress at Polaris Forge 2 reinforces APLD’s positioning in AI infrastructure.
APLD’s Price Performance
Image Source: Zacks Investment Research
With the stock sharply re-rated, does APLD still offer upside at current levels, or is much of the optimism already priced in? Let’s delve deeper to find out.
Contracted Revenue Visibility Provides Foundation
Applied Digital’s long-term revenue visibility is anchored by its arrangements with CoreWeave, representing $11 billion in contracted lease revenues tied to the full 400-megawatt commitment at Polaris Forge 1. This provides a multi-year outlook as the first 100-megawatt building approaches readiness and transitions into recurring lease revenue. CoreWeave’s engagement for tenant fit-out services also supports near-term activity, helping bridge the period between construction and lease monetisation.
With a substantial portion of capacity already committed under long-duration agreements, APLD is positioned to move toward a more predictable, infrastructure-style revenue mix as additional phases come online. Progress at Polaris Forge 2 extends this visibility beyond the initial campus, reinforcing confidence in APLD’s ability to replicate its contracted model. Once Polaris Forge 1 reaches full operation, the campus is expected to support approximately $500 million in annual net operating income, underscoring the scale of the financial inflection. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $280.9 million, reflecting a 30.35% year-over-year increase.
APLD’s Strategic Positioning in AI Infrastructure
The acceleration of artificial intelligence adoption has triggered an unusually concentrated wave of infrastructure investment, with hyperscalers committing substantial capital toward AI-ready data centers. This shift has elevated demand for developers that can deliver power-dense, purpose-built facilities at speed, rather than traditional colocation capacity. APLD is well-positioned to benefit from this constrained supply environment.
APLD’s active development pipeline spans roughly 4 gigawatts, with 700 megawatts currently under construction, providing meaningful scale relative to its size. APLD has shortened construction timelines to approximately 12–14 months from nearly 24 months, improving alignment with hyperscaler deployment schedules. Beyond its existing CoreWeave relationship, APLD is engaged in discussions with additional hyperscalers for new sites. Progress at Polaris Forge 2 near Harwood, ND, further reinforces this positioning, with the 300-megawatt campus designed to scale toward 1 gigawatt, aligning capacity expansion with long-term AI infrastructure demand.
Financial Structure Supports Expansion
APLD’s capital structure supports expansion while limiting reliance on frequent equity issuance. In October 2025, the company drew $112.5 million from its $5 billion preferred equity facility with Macquarie Asset Management to fund construction at Polaris Forge 1. When combined with project financing, this structure unlocks an estimated $20–25 billion in capital capacity, positioning APLD to advance multiple campuses in parallel.
Project financing for Polaris Forge 1 is expected to close during the second quarter of fiscal 2026 with approximately 70% loan-to-cost ratios. APLD secured $50 million in initial funding from Macquarie Equipment Capital for the $3 billion Polaris Forge 2 development. This financial architecture allows APLD to scale in line with the accelerated deployment timelines required by hyperscale customers building compute capacity for next-generation AI workloads.
For fiscal 2026, the Zacks Consensus Estimate for loss is pegged at 31 cents per share, improving from the year-ago loss of 80 cents per share, with estimates improving 5cents over the past 60 days.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
Valuation Reflects Early-Stage Monetisation
Applied Digital stock trades at a forward 12-month price-to-sales (P/S) of 18.43X, well above the Zacks industry average of 3.35X and the broader sector’s multiple of 9.07X. APLD also commands a premium to peers such as Riot Platforms and Equinix, which trade at P/S multiples of 7.79X and 7.37X, respectively.
While the valuation gap versus Riot Platforms and Equinix appears wide, it reflects APLD’s earlier position in the monetisation cycle. The market is valuing contracted hyperscale demand and future NOI generation rather than current utilisation. As Polaris Forge assets move into operation, revenue recognition is expected to accelerate, supporting the premium valuation.
APLD’s P/S F12M Ratio
Image Source: Zacks Investment Research
Conclusion
APLD’s sharp rally over the past six months reflects a fundamental re-rating driven by improving revenue visibility, scalable AI-focused infrastructure and a capital structure that supports disciplined expansion. While the stock trades at a premium, the valuation is supported by long-duration hyperscale contracts and a clear path toward recurring net operating income as Polaris Forge assets come online. With monetisation still in the early stages, investors can consider buying APLD at current levels.
Applied Digital carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.