Key Stats for Applied Digital Stock
- Price Change for Applied Digital stock: -3%
- $APLD Share Price as of Dec. 30: $24.08
- 52-Week High: $40.20
- $APLD Stock Price Target: $43.70
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What Happened?
Applied Digital (APLD) stock has been volatile in recent months as the company executes an aggressive buildout strategy for AI data centers while simultaneously pursuing a strategic separation of its cloud computing business.
The most recent developments show Applied Digital accelerating its transformation from a small Bitcoin hosting operation into one of the leading builders of hyperscale AI infrastructure.
The company announced that CoreWeave, a publicly traded AI hyperscaler, exercised its option to expand its lease agreement at Applied Digital’s Polaris Forge 1 campus in Ellendale, North Dakota, from 250 megawatts to the full 400 megawatts currently under construction.
This increases the total contract value from roughly $7 billion to approximately $11 billion over 15 years. Applied Digital also broke ground on Polaris Forge 2 near Harwood, North Dakota, initially planning to build 300 megawatts, with potential to scale to 1 gigawatt.
On the financing side, APLD stock got a boost from the announcement of a $5 billion preferred equity facility with Macquarie Asset Management.
The company drew an initial $112.5 million to advance construction at Polaris Forge 1, and management emphasized that this structure is designed to minimize future equity dilution while enabling rapid scaling across multiple campuses.
CEO Wes Cummins highlighted that Applied Digital now has 700 megawatts under construction and a 4-gigawatt active development pipeline. The company has also entered negotiations with multiple additional hyperscalers for new locations beyond its North Dakota campuses.
Applied Digital also announced plans to spin off its cloud computing business through a reverse merger with EKSO Bionics, creating a new entity called ChronoScale Corporation. APLD stock fell almost 3% yesterday following this announcement.
Applied Digital would retain approximately 97% ownership of the combined company, which will focus exclusively on GPU-accelerated cloud infrastructure for AI workloads. The cloud business generated roughly $75.2 million in trailing twelve-month revenue as of August 31, 2025.
For Q1 fiscal 2026, Applied Digital reported revenue of $64.2 million, up 84% year-over-year. About $26.3 million came from tenant fit-out services for CoreWeave’s first 100-megawatt building, with management expecting that figure to ramp significantly in Q2.
The company posted a net loss of $27.8 million, though adjusted EBITDA was $0.5 million.
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What the Market Is Telling Us About APLD Stock
The market’s treatment of APLD stock reflects the tension between massive growth potential and significant execution risk.
On one hand, Applied Digital is positioned at the center of an unprecedented infrastructure buildout. Hyperscalers are expected to invest over $350 billion in AI data centers this year alone, and power constraints have made proven developers like Applied Digital increasingly valuable.
Cummins drew a striking comparison on the earnings call, noting that hyperscalers will invest more in AI infrastructure in a single year than the inflation-adjusted cost of building the entire U.S. Interstate Highway System, which took 30 years to complete.
The Department of Energy estimates a power shortfall for data centers of 40 to 50 gigawatts, with some experts, like former Google CEO Eric Schmidt, suggesting it could exceed 90 gigawatts.
Applied Digital’s North Dakota campuses offer strategic advantages, including abundant low-cost energy, more than 200 days of free natural cooling annually, and a supportive regulatory environment.
The company’s proprietary design targets a power usage effectiveness ratio of 1.18 with near-zero water consumption, potentially giving it a competitive edge on total cost of ownership.
The Macquarie financing structure also addresses one of the most prominent concerns investors had about APLD stock—the need for continuous equity raises to fund buildouts.
By securing capital at the asset level with a clear framework, Applied Digital can theoretically unlock $20 billion to $25 billion in total capital when combined with project financing, significantly reducing future dilution at the public company level.
However, risks remain substantial. Applied Digital is still pre-revenue on its data center leases, with the first 100 megawatts expected to start generating lease income toward the end of calendar 2025. Tenant fit-out revenue provides near-term cash flow but operates at mid-single-digit margins.
Applied Digital is also navigating a complex financing environment. CFO Saidal Mohmand said he expects to complete project financing for the CoreWeave-backed buildings within the fiscal quarter, targeting a 70% loan-to-cost and pricing at 400-450 basis points over SOFR.
This financing is critical to validating the business model and demonstrating that asset-level returns can support the capital structure.
APLD stock also faces competitive pressure as new entrants flood the market. Cummins acknowledged that Applied Digital has been “flooded with opportunities” from parties who secured power and land but lack the design and construction capabilities to meet hyperscaler requirements.
He suggested the market could see a “shakeout” over the next 12 months as some new developers fail to meet construction timelines.
The ChronoScale spinoff adds another layer of complexity. While separating the cloud business could unlock value by allowing each entity to pursue distinct growth strategies, it also means Applied Digital is executing a major corporate restructuring while simultaneously building multiple gigawatt-scale campuses.
For long-term investors, the bull case centers on Applied Digital’s early-mover advantage and proven execution. The company was among the first to break ground on next-generation data center designs in 2023, secured key supply chain partnerships early, and built relationships with top hyperscalers through rigorous technical due diligence.
With $11 billion in contracted revenue at Polaris Forge 1 alone and potential for similar economics at Polaris Forge 2 and beyond, APLD stock could deliver substantial returns if management can execute its ambitious buildout plan without significant delays or cost overruns.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
