Applied Digital Corporation Common Stock
APLD
$18.25
-4.40%
Applied Digital Corporation designs, builds, owns, and operates large-scale, purpose-built data centers engineered for high-performance computing (HPC) workloads, including AI training and inference, machine learning, and other accelerated-compute applications, which it markets as 'AI Factories' and leases to hyperscalers and compute customers under long-term contracts; it also operates a legacy crypto data-center hosting business that still supplies the majority of current revenue. With only 256 employees and a market capitalization in the multi-billion-dollar range, the company is a capital-intensive infrastructure developer rather than a technology platform, positioning itself as a pure-play landlord to the AI compute buildout and a smaller, higher-beta alternative to larger neocloud peers. The investor narrative is dominated by the roughly $36 billion of contracted revenue backlog disclosed in recent coverage, anchored by a $7.5 billion hyperscaler lease announced in April 2026 that validated the AI-factory model and triggered a sharp rally; bulls frame APLD as a levered call option on AI infrastructure demand, while bears focus on construction execution, customer concentration, and the debt-financed capex treadmill. The debate has intensified as the stock has fallen roughly 50% over the past year even as contracted backlog grew, with headlines in August and October 2026 explicitly framing the question as whether the contracted revenue is mispriced or whether financing and execution risk justify the discount.…
APLD
Applied Digital Corporation Common Stock
$18.25
Related headlines
APLD 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Applied Digital Corporation Common Stock's 12-month outlook, with a consensus price target around $62.44 and implied upside of +242.1% versus the current price.
Average Target
$62.44
0 analysts
Implied Upside
+242.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$22 - $93
Analyst target range
Bulls vs Bears: APLD Investment Factors
The bear case currently has stronger near-term evidence: APLD is burning $2.78 billion in free cash flow, carries 2.86x debt-to-equity, is deeply unprofitable (net margin -39.9%), and trades at 21.6x sales while the stock has fallen 50.7% over the past year. The bull case rests on a $36 billion contracted backlog and a $7.5 billion hyperscaler lease that, if executed, would make the current $7.6 billion market cap look deeply undervalued. The single most important tension is financing and construction execution: if APLD can convert backlog into revenue without dilutive or expensive capital raises, the stock is mispriced; if financing costs rise or construction slips, the equity could be structurally impaired. Analyst consensus (strong_buy, $64.27 average target) sides with the bulls, but the market's -66% relative underperformance signals deep skepticism about execution.
Bullish
- $36B contracted backlog vs $7.6B cap: Applied Digital has disclosed roughly $36 billion of contracted revenue backlog, anchored by a $7.5 billion hyperscaler lease announced in April 2026. That backlog is roughly 4.7x the company's $7.6 billion market capitalization, implying the market is pricing in severe execution and financing discounts on already-signed revenue.
- Revenue inflecting sharply on AI buildout: Quarterly revenue rose from $64.2 million in Q1 FY26 to $126.6 million in Q3 FY26 and $258.7 million in Q4 FY26, with Q4 revenue up 5.8x year-over-year versus $38.0 million in Q4 FY25. The Q4 gross margin of 15.7% on a much larger base shows the AI-factory model is beginning to convert into operating scale.
- Analyst consensus strongly bullish: All 15 covering analysts rate the stock a 'strong_buy' with a recommendation mean of 1.4, and the average target price of $64.27 implies roughly 256% upside from the current $18.05. Even the lowest target of $22.00 sits about 22% above the current price, suggesting the selloff has overshot fundamental expectations.
- Hyperscaler validation de-risks demand: The $7.5 billion lease from an investment-grade hyperscaler validates the AI-factory model and improves long-term revenue visibility and customer quality, per the April 2026 coverage. This shifts the debate from 'is there demand' to 'can APLD build and finance it,' a more manageable risk.
Bearish
- Cash burn of $2.78B dwarfs revenue: TTM free cash flow is -$2.78 billion against Q4 revenue of only $258.7 million, reflecting a massive debt-financed capex treadmill. The company must continuously raise capital to fund construction, and any financing-market closure would be existential.
- Deeply unprofitable with negative EBITDA: Q4 FY26 net income was -$110.0 million (net margin -42.5%), operating income -$117.0 million, and EBITDA -$80.8 million. Trailing net margin is -39.9% and ROE is -13.7%, so profitability remains far off despite the revenue surge.
- Extreme leverage and dilution risk: Debt-to-equity stands at 2.86x, and shares outstanding grew from 149.0 million (Q1 FY25) to 285.7 million (Q4 FY26), roughly a 92% increase in under two years. Continued equity issuance to fund capex will keep diluting per-share economics.
- Valuation stretched on every metric: Price-to-sales is 21.6x, price-to-book 7.4x, and EV/sales 13.6x, with a negative trailing PE of -52.7 and forward PE of -23.0. The market is paying a premium for revenue that does not yet exist and may never convert to profit.
APLD Technical Analysis
Beta
6.00
6.00x market volatility
Max Drawdown
-63.6%
Largest decline past year
52-Week Range
$18-$51
Price range past year
Annual Return
-45.3%
Cumulative gain past year
| Period | APLD Return | S&P 500 |
|---|---|---|
| 1m | -33.0% | -1.0% |
| 3m | -32.9% | +2.9% |
| 6m | -47.8% | +6.5% |
| 1y | -45.3% | +13.1% |
| ytd | -35.1% | +11.4% |
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APLD Fundamental Analysis
Quarterly Revenue
$258748000.0B
2026-05
Revenue YoY Growth
+580.7%
YoY Comparison
Gross Margin
15.7%
Latest Quarter
Free Cash Flow
$-2.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is APLD Overvalued?
PE
-52.7x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-197.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are acute. TTM free cash flow of -$2.78 billion against Q4 revenue of just $258.7 million means APLD is funding construction almost entirely with external capital, and debt-to-equity of 2.86x plus a 92% increase in shares outstanding since Q1 FY25 (149.0 million to 285.7 million) show the cost is being borne through both leverage and dilution. Gross margin fell to 15.7% in Q4 FY26 from 42.5% in Q3 FY26, and EBITDA was -$80.8 million, so the company is not yet generating the operating leverage that would justify the buildout. Revenue is also concentrated in a small number of hyperscaler contracts, so a single customer delay or renegotiation would hit results disproportionately.
Market and competitive risks compound the financial picture. At 21.6x sales, 7.4x book, and 13.6x EV/sales with a negative PE, APLD trades at a premium that assumes flawless execution, leaving little room for disappointment; any multiple compression would be severe. The beta of 6.0 means the stock amplifies market moves roughly sixfold, and the August 2026 CoreWeave debt-financing selloff shows how quickly sentiment can turn against leveraged AI-infrastructure names. Competitive pressure from larger, better-capitalized neocloud peers (CoreWeave's revenue is roughly 16x APLD's) and sensitivity to interest rates and AI capex sentiment add external risk.
The worst-case scenario is a financing squeeze: rising rates or a failed capital raise force APLD to slow construction, delaying contracted revenue recognition, which triggers analyst downgrades and further equity weakness. In that chain, the stock could retest its 52-week low of $17.65, only about 2% below the current $18.05, and the max drawdown of -63.7% shows how far a momentum unwind can carry it. A more severe outcome, such as a hyperscaler contract renegotiation, could push the stock toward the analyst low target of $22.00 on the upside but well below current levels on a fundamental re-rating, implying losses of 20-40% from here in an adverse scenario.