Applied Digital Corp. (APLD) Stock Analysis and Metrics

Applied Digital

NASDAQ: APLD

$27.19 ▼ -2.70 (-9.03%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap8.74 Bn

P/E-43.81

P/S30.77

Div. Yield0.00

ROIC (Qtr)-0.01

Total Debt (Qtr)2.59 Bn

Revenue Growth (1y) (Qtr)139.29

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About

Applied Digital Corp. is a United States designer developer and operator of next generation data center infrastructure across North America. It provides data center infrastructure solutions to the high performance computing and artificial intelligence industries.

The company generates revenue by providing energized infrastructure services to customers who rent data center space based on their power requirements. Revenue is derived from its Data Center Hosting Business which serves crypto mining clients and from its HPC Hosting Business which is developing facilities for high performance computing and artificial intelligence workloads.

The company operates through the following segments: Data Center Hosting Business and HPC Hosting Business.

• Data Center Hosting Business provides energized infrastructure services to crypto mining customers; custom designed data centers allow customers to rent space based on power requirements; operates sites in Jamestown and Ellendale, North Dakota with total hosting capacity of approximately 286 megawatts; serves one crypto mining customer with a remaining contract term of two and a half years.

• HPC Hosting Business specializes in designing constructing and operating data centers tailored to support high power density applications such as high performance computing and artificial intelligence; currently building a high performance computing focused campus comprising three data centers in Ellendale, North Dakota; the first two buildings under construction are a 100 megawatt and a 150 megawatt facility; a third 150 megawatt data center is planned; the company has entered into two lease agreements for the first two buildings totaling 250 megawatts; expects to begin generating meaningful revenues once the first building becomes operational in calendar year 2025.

Applied Digital Corp. faces competition from established data center operators such as Digital Realty Equinix Inc. NTT and various private providers. In its Data Center Hosting Business it competes with companies like Bitdeer Technologies Group and Riot Platforms as well as other private mining hosting operators. Many competitors benefit from larger geographic footprints stronger brand recognition longer operating histories and greater financial resources. Applied Digital Corp. seeks to differentiate itself by focusing on specialized high power density facilities designed for artificial intelligence workloads and by securing long term contracts with anchor tenants.

The company serves a single crypto mining customer in its Data Center Hosting Business under a contract with approximately two and a half years remaining. In its HPC Hosting Business it has one customer who is party to two fifteen year lease agreements for the developing facilities.

Investment Thesis

▲ Bull case

Applied Digital Corporation is positioned to capitalize on a structural shift in data center demand driven by hyperscalers' sustained capital expenditure growth, with annual AI infrastructure spending rising from $400 billion to nearly $700 billion in under three months, creating a durable tailwind for long-term leased capacity. The company's $16 billion contracted lease backlog, now expanded to over $23 billion following the Delta Forge 1 and Delta Forge 2 hyperscaler leases, represents a multi-decade annuity stream backed by investment-grade counterparties, with 70% of contracted revenue now derived from U.S.-based investment-grade hyperscalers. This de-risks revenue predictability and supports the company's internal target of $1 billion in annual NOI within five years, as the Polaris Forge 1 and 2 campuses, along with Delta Forge sites, transition from construction to cash generation, with staged energization beginning in Q3 FY26 and ramping through 2027 and 2028. The credit enhancement from CoreWeave's SPV achieving an A3 rating—up from BB—lowers refinancing risk for the remaining $150 million tranche at Polaris Forge 1 and enables future debt placement at investment-grade spreads, reducing cost of capital as the portfolio scales. Furthermore, the Preferred Equity Access framework with Macquarie Asset Management provides $4.1 billion in committed capital upon execution of investment-grade leases, allowing Applied Digital Corporation to retain over 80% common equity ownership in new sites while minimizing dilution and preserving shareholder value as it expands beyond five gigawatts of critical IT load. The Base Electron initiative, structured as a separate IPP with Babcock & Wilcox, adds 1.2 gigawatts of natural gas-fired generation to the Dakotas grid, addressing long-term power constraints without exposing shareholders to generation risk, while granting a 10% equity stake that captures upside if the project achieves financing milestones or an IPO. Finally, the planned separation of the Cloud business into ChronoScale Corporation eliminates a persistent drag on GAAP results—evidenced by the $59.7 million non-cash write-down and $52.2 million operating loss in Q3 FY26—enabling focused capital allocation to the high-margin HPC hosting and data center segments, which delivered $17.6 million and $13.9 million in operating profit respectively, and allowing independent valuation and potential spin-off to shareholders, unlocking hidden value in the GPU-optimized AI infrastructure business.

Applied Digital Corporation is positioned to capitalize on a structural shift in data center demand driven by hyperscalers' sustained capital expenditure growth, with annual AI infrastructure spending rising from $400 billion to nearly $700 billion in under three months, creating a durable tailwind for long-term leased capacity. The company's $16 billion contracted lease backlog, now expanded to over $23 billion following the Delta Forge 1 and Delta Forge 2 hyperscaler leases, represents a multi-decade annuity stream backed by investment-grade counterparties, with 70% of contracted revenue now derived from U.S.-based investment-grade hyperscalers. This de-risks revenue predictability and supports the company's internal target of $1 billion in annual NOI within five years, as the Polaris Forge 1 and 2 campuses, along with Delta Forge sites, transition from construction to cash generation, with staged energization beginning in Q3 FY26 and ramping through 2027 and 2028. The credit enhancement from CoreWeave's SPV achieving an A3 rating—up from BB—lowers refinancing risk for the remaining $150 million tranche at Polaris Forge 1 and enables future debt placement at investment-grade spreads, reducing cost of capital as the portfolio scales. Furthermore, the Preferred Equity Access framework with Macquarie Asset Management provides $4.1 billion in committed capital upon execution of investment-grade leases, allowing Applied Digital Corporation to retain over 80% common equity ownership in new sites while minimizing dilution and preserving shareholder value as it expands beyond five gigawatts of critical IT load. The Base Electron initiative, structured as a separate IPP with Babcock & Wilcox, adds 1.2 gigawatts of natural gas-fired generation to the Dakotas grid, addressing long-term power constraints without exposing shareholders to generation risk, while granting a 10% equity stake that captures upside if the project achieves financing milestones or an IPO. Finally, the planned separation of the Cloud business into ChronoScale Corporation eliminates a persistent drag on GAAP results—evidenced by the $59.7 million non-cash write-down and $52.2 million operating loss in Q3 FY26—enabling focused capital allocation to the high-margin HPC hosting and data center segments, which delivered $17.6 million and $13.9 million in operating profit respectively, and allowing independent valuation and potential spin-off to shareholders, unlocking hidden value in the GPU-optimized AI infrastructure business.

▼ Bear case

Applied Digital Corporation faces significant execution and market risks that could undermine its aggressive growth targets, particularly the reliance on timely lease signings and construction completion across its 900 megawatts under construction, with management acknowledging uncertainty in power infrastructure development, including regulatory approvals, transmission lines, and new power plant construction, which could delay revenue recognition beyond the projected mid-2027 start for Delta Forge One and Q1 FY28 for Delta Forge Two. The company's $23 billion contracted lease revenue, while impressive, remains contingent on tenant performance and credit stability, with over 60% still tied to CoreWeave—a company whose financial health and access to capital could be volatile in a tightening macro environment, potentially jeopardizing the look-through benefit and springing parent guarantee that currently supports the A3-rated SPV structure. Despite credit enhancements, the $2.7 billion in debt against $2.1 billion in cash creates a leverage profile that may become strained if NOI growth lags, especially given the SG&A expense surge of $57 million to $79.7 million, driven largely by $39.3 million in stock-based compensation, indicating persistent overhead bloat from headcount expansion and performance awards that could erode margins as the business scales. The data center hosting segment, while currently generating $13.9 million in operating profit on $119.6 million in assets, faces long-term headwinds from Bitcoin mining conversion trends and potential oversupply in lower-cost regions, challenging the sustainability of its high return on assets. Furthermore, the Base Electron initiative, though structured to isolate generation risk, depends on successful fundraising or an IPO to terminate Applied Digital Corporation's credit support, and failure to meet the $50 million threshold could leave the guarantee in place longer than anticipated, exposing the balance sheet to contingent liabilities. The company's ambition to reach five to six gigawatts of critical IT load assumes continued hyperscaler demand at current levels, yet any slowdown in AI capex—whether due to economic headwinds, regulatory scrutiny, or technological shifts toward more efficient computing—could leave significant capacity underutilized, undermining the NOI growth trajectory and the validity of the five to six times NOI leverage target, particularly if refinancing into ABS or equivalent markets fails to materialize at expected rates due to shifting investor appetite for data center debt.

Applied Digital Corporation faces significant execution and market risks that could undermine its aggressive growth targets, particularly the reliance on timely lease signings and construction completion across its 900 megawatts under construction, with management acknowledging uncertainty in power infrastructure development, including regulatory approvals, transmission lines, and new power plant construction, which could delay revenue recognition beyond the projected mid-2027 start for Delta Forge One and Q1 FY28 for Delta Forge Two. The company's $23 billion contracted lease revenue, while impressive, remains contingent on tenant performance and credit stability, with over 60% still tied to CoreWeave—a company whose financial health and access to capital could be volatile in a tightening macro environment, potentially jeopardizing the look-through benefit and springing parent guarantee that currently supports the A3-rated SPV structure. Despite credit enhancements, the $2.7 billion in debt against $2.1 billion in cash creates a leverage profile that may become strained if NOI growth lags, especially given the SG&A expense surge of $57 million to $79.7 million, driven largely by $39.3 million in stock-based compensation, indicating persistent overhead bloat from headcount expansion and performance awards that could erode margins as the business scales. The data center hosting segment, while currently generating $13.9 million in operating profit on $119.6 million in assets, faces long-term headwinds from Bitcoin mining conversion trends and potential oversupply in lower-cost regions, challenging the sustainability of its high return on assets. Furthermore, the Base Electron initiative, though structured to isolate generation risk, depends on successful fundraising or an IPO to terminate Applied Digital Corporation's credit support, and failure to meet the $50 million threshold could leave the guarantee in place longer than anticipated, exposing the balance sheet to contingent liabilities. The company's ambition to reach five to six gigawatts of critical IT load assumes continued hyperscaler demand at current levels, yet any slowdown in AI capex—whether due to economic headwinds, regulatory scrutiny, or technological shifts toward more efficient computing—could leave significant capacity underutilized, undermining the NOI growth trajectory and the validity of the five to six times NOI leverage target, particularly if refinancing into ABS or equivalent markets fails to materialize at expected rates due to shifting investor appetite for data center debt.

Related and Nonrelated Parties Breakdown of Revenue (2025)

Peer Comparison

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1	IBM	International Business Machines Corp	193.88 Bn	8,812.83	2.81	61.99 Bn
2	ACN	Accenture plc	84.94 Bn	10.70	1.16	5.14 Bn
3	GDS	GDS Holdings Ltd	50.55 Bn	126.44	29.45	-
4	INFY	Infosys Ltd	44.05 Bn	0.29	0.05	-
5	GIB	Cgi Inc	41.25 Bn	0.32	3.47	2.65 Bn
6	FIS	Fidelity National Information Services, Inc.	20.63 Bn	134.81	1.80	16.99 Bn
7	CTSH	Cognizant Technology Solutions Corp	20.39 Bn	9.24	0.95	0.57 Bn
8	WIT	Wipro Ltd	18.65 Bn	12.56	1.80	1.88 Bn

Research Tools

Developers

About

Investment Thesis

Related and Nonrelated Parties Breakdown of Revenue (2025)

Related and Nonrelated Parties Breakdown of Revenue (2025)

Peer Comparison

Research Tools

Developers

About

Investment Thesis

Related and Nonrelated Parties Breakdown of Revenue (2025)

Related and Nonrelated Parties Breakdown of Revenue (2025)

Peer Comparison

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