Key Takeaways
- Applied Digital jumped 7% today after a rival said its more than $4 billion annualized revenue target is fully funded.
- Applied Digital still needs funding for roughly 800 MW more over the next 12 months.
- A Texas pause on new data center approvals hits that rival’s and Galaxy Digital’s sites harder than Applied Digital’s.
- Applied Digital’s next debt deal matters most for the stock.
Applied Digital (APLD) jumped 7% this morning on no news of its own. It’s riding a data center rebound after a rival said after Thursday’s close that its more than $4 billion annualized revenue target is “fully contracted and fully funded.”
That follows Thursday’s 15% drop to a 52-week low, a selloff over the midterms that also hit Galaxy Digital (GLXY).
The rival’s money is mostly lined up
Its AI Cloud revenue nearly tripled from the prior quarter, to $200 million. “Fully funded” covers the build behind its $4 billion target. But $6 billion of the $15 billion IREN (IREN) still plans to spend this fiscal year depends on financing subject to market conditions.
Applied Digital still needs the money
Analysts expect Applied Digital’s revenue to more than triple from fiscal 2026 to fiscal 2028:
That growth rests on 1,410 MW of signed leases. The stock trades at 4.7x forward sales, well under its three-year average of 11x:
But debt has run far ahead of cash:
Total debt hit $6.48 billion by Aug. 31, and CEO Wes Cummins said on CNBC on Monday that it needs funding for roughly 800 MW more within 12 months.
TIKR tracks 16 analysts on Applied Digital. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Applied Digital, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Applied Digital’s Analyst Ratings
Texas is IREN’s problem more than Applied Digital’s
Texas Governor-elect Gina Hinojosa has pledged to halt new data center approvals until the state writes rules on power and water costs. Applied Digital’s only Texas project is a planned 50 MW site; its leased campuses are elsewhere. IREN’s Microsoft buildings are in Childress, Texas.
Galaxy’s Helios campus in Dickens County, Texas, has its next phase fully financed, but 830 MW of approved capacity there still has no tenant. Will a halt on new approvals leave that capacity alone?
A fair bounce, with a bill attached
The Texas pause doesn’t threaten Applied Digital’s leases, so I’d call today’s bounce earned.
Now watch the debt for its next three campuses. Pricing near the 7.00% its June notes paid would be a good sign, and anything near last November’s 9.25% would hand more of the rent to lenders.
So what is Applied Digital stock actually worth?
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