Applied Digital Corporation (NASDAQ: APLD) is having one of those “welcome to modern markets” weeks: a big rally story colliding with a sudden mood swing around AI infrastructure leverage, tenant risk, and valuation.
After a sharp sell-off at the start of the week, APLD was trading around $22.65 on Dec. 16, 2025 (latest quote captured at 16:04 UTC), with the session ranging roughly from the low $22s to the mid $24s and volume in the tens of millions.
Below is a full, publication-ready breakdown of today’s key news, forecasts, and analyst takes (dated Dec. 16, 2025)—plus the fundamentals and risks that are driving the argument on both sides.
What happened to Applied Digital stock?
The move: a sharp drop, then choppy trading
Market coverage and data providers largely agree on the near-term setup:
- APLD fell about 17.5% intraday on Monday, trading down to about $22.98, after previously closing around $27.86, with ~43 million shares changing hands (above average volume). [1]
- Into Tuesday, commentary described the sell-off as part of a broader AI-infrastructure valuation pullback, with options hedging picking up as traders bought protection. [2]
- On Dec. 16 itself, the stock was still swinging sharply, last seen around $22.65 on the day, underscoring how fast sentiment is changing for AI data center names.
That combination—high volume + big percent move + heavy options activity—is the classic recipe for “headline volatility,” which is exactly where APLD is living right now.
Why did APLD stock drop? No single press release—more like a sector gut-check
Multiple Dec. 16 analyses point to the same theme: this was not triggered by a single, obvious company announcement. Instead, investors appear to be repricing the entire “AI infrastructure buildout” trade, especially for companies relying on large amounts of financing.
1) “Debt party” fears are spreading across AI data center builders
A Dec. 16 analysis from 24/7 Wall St. framed the move as a leverage-and-financing story: capital-intensive AI data center models look amazing when markets are risk-on—and look scary when investors start asking, “Who’s paying for all this, and at what interest rate?” [3]
That same piece also noted sell-offs across peers (examples cited included IREN, Nebius, Cipher Mining) and referenced concerns about heavy borrowing and a potential “debt bomb” dynamic for capital-intensive players. [4]
2) Options markets flashed caution
TipRanks described elevated options activity and a rise in put demand (protective positioning), interpreting it as short-term caution rather than a reaction to company-specific news. [5]
3) Macro “AI bubble” nerves are back in the conversation
Zooming out, Reuters coverage in December highlighted how easily “AI trade” sentiment can turn when big capex numbers hit the tape—citing investor wariness around AI bets and the scale of spending increases. [6]
And Reuters Breakingviews has been explicitly flagging the structural risk in this boom: data center developers can be fine—until tenant credit quality (and the ability to keep paying long leases) becomes the weak link. [7]
That matters for Applied Digital because its growth narrative is built on multi-year leasing and campus buildouts that depend on consistent tenant performance.
The bull case for Applied Digital: contracted leases and “AI factory” scale
APLD isn’t just a meme-y ticker riding vibes. The company has laid out a real infrastructure strategy, and it’s backed by major contracts and financing activity.
1) CoreWeave leases: long-duration revenue story
In its Q1 fiscal 2026 results release, Applied Digital said it finalized a new CoreWeave lease for an additional 150 MW at its Polaris Forge 1 campus, bringing total anticipated contracted lease revenue for Polaris Forge 1 to approximately $11 billion, including $7 billion from the initial two ~15-year leases executed earlier in 2025. [8]
Reuters also reported in June that Applied Digital entered into two 15-year leases with CoreWeave expected to generate about $7 billion in revenue over the lease period. [9]
2) Another major lease: $5 billion hyperscaler agreement
In October, Reuters reported that Applied Digital signed a $5 billion lease with a U.S.-based hyperscaler for 200 MW at its Polaris Forge 2 campus, with the agreement expected to run about 15 years and generate about $5 billion in contracted revenue. [10]
That’s a big deal because it supports the core “AI infrastructure landlord” thesis: build capacity, sign long leases, scale campuses.
3) Operational buildout: what management recently highlighted
In the same Q1 fiscal 2026 release, the company described:
- Work nearing completion on a 100 MW building at Polaris Forge 1 (on time/on budget, per the release)
- Construction beginning on the next 150 MW building
- Post-quarter financing draws and funding tied to scaling additional campuses, including Polaris Forge 2 timelines (initial capacity expected online in 2026 with full capacity in 2027, per the release). [11]
For long-horizon investors, those are the “real world” milestones that matter more than any single day of trading.
The bear case: leverage, tenant concentration, and valuation are doing the scaring
Here’s the uncomfortable truth: the same features that make APLD exciting also make it fragile if market conditions tighten.
1) Big financing at high rates (and investors hate refinancing risk)
Applied Digital announced in November that a subsidiary priced a $2.35 billion offering of 9.250% senior secured notes due 2030 (issue price 97%), with proceeds intended to fund data center construction and repay/refinance existing obligations, among other uses. [12]
24/7 Wall St. also highlighted the company’s reliance on financing in a capital-intensive sector, pointing to debt and cash figures and explicitly tying investor discomfort to leverage. [13]
2) Tenant/credit risk is the structural question in AI data centers
Reuters Breakingviews has been blunt: lenders and developers are exposed if the companies renting these facilities stop being creditworthy, and the mismatch between customer contract length and long data center lease obligations can become a stress point for “neo-cloud” middlemen. [14]
That doesn’t mean Applied Digital’s tenants will fail. It means the market is re-pricing the risk that the chain of payments matters as much as the technology hype.
3) Very high short interest amplifies both crashes and squeezes
As of the most recent MarketBeat data (record date Nov. 28, 2025), Applied Digital had about 80.34 million shares sold short, representing about 31.87% of the public float, with a days-to-cover figure around 3.0. [15]
High short interest can do two opposite things:
- Make drawdowns worse when momentum breaks (shorts press)
- Create explosive rallies if good news forces short covering (squeezes)
Either way, it typically means higher volatility than “normal stocks.”
4) “Great story, expensive stock” risk
A Dec. 16 Trefis note argued the stock could be “unattractive” at current levels based on a multi-factor framework, floating a bearish scenario as low as $16 and emphasizing “very high” valuation versus broader-market measures. [16]
Even if you disagree with the target, this is the key debate: how much future growth is already priced in—especially after a huge year-to-date run?
Analyst forecasts and price targets for APLD: why the numbers don’t match
If you’ve looked up “Applied Digital stock forecast” today, you’ve probably seen wildly different targets. That’s not you being confused—that’s the internet doing internet things.
Here’s what major trackers showed around Dec. 16, 2025:
- MarketBeat listed a consensus leaning “Moderate Buy” with an average price target of $26.20 (page updated 12/16/2025). [17]
- StockAnalysis showed a “Strong Buy” consensus and a price target around $29.36 (real-time page context shows Dec. 16, 2025). [18]
- TipRanks commentary cited a much higher average target (example referenced: $42.78) and described bullish analyst sentiment based on recent buys, while still acknowledging short-term volatility. [19]
- Trefis argued for a bearish valuation-driven scenario with downside risk to $16 in its framework. [20]
Why the “forecast” is different everywhere
Price targets diverge because:
- Some sites update faster than others
- Some include older targets that may not reflect the latest volatility
- “Consensus” can mean different analyst sets and weighting systems
- Time horizons vary (3–6 months vs 12 months vs multi-year)
In other words: treat targets as sentiment markers, not GPS coordinates.
What to watch next: the catalysts that matter more than today’s candle
If you’re tracking Applied Digital stock beyond the day-to-day chaos, these are the practical catalysts that tend to move the narrative:
1) Buildout milestones and power delivery
Applied Digital’s story is fundamentally about taking campuses from “planned” to “energized” to “revenue-producing,” with tenant fit-outs and phased capacity coming online. The company has discussed leasing status and build progression in recent updates. [21]
2) Financing execution and balance sheet clarity
The market will keep scoring APLD on:
- Cost of capital
- Refinancing risk
- Whether long-dated leases truly de-risk the debt stack
The November notes offering details are central here. [22]
3) Tenant concentration and contract durability
With large contracts linked to CoreWeave and hyperscaler leasing, investors will be hypersensitive to any news that impacts tenant health, GPU demand, or contract structure. [23]
4) Next earnings date: estimates cluster, but not officially scheduled
Applied Digital’s IR calendar currently lists no upcoming events scheduled, meaning the next earnings date may not be formally announced yet. [24]
However, third-party calendars commonly estimate a mid-January 2026 earnings window (several sources point to Jan. 13, 2026 as an estimate). [25]
Bottom line for Applied Digital (APLD) stock on Dec. 16, 2025
APLD is a classic 2025 market paradox: a company positioned in a real, massive secular buildout (AI compute + data centers) while also sitting at the center of the market’s newest fear (leverage + tenant credit risk + valuation compression).
- The bull story is multi-year leasing and campus scale, with major contracted revenue figures and expansion plans. [26]
- The bear story is financing cost, execution risk, tenant concentration, and a valuation that can snap downward when the market’s appetite for leveraged growth fades. [27]
- The trader’s story is simple: high short interest + high implied volatility + high sensitivity to sector sentiment equals “expect drama.” [28]
References
1. www.marketbeat.com, 2. www.tipranks.com, 3. 247wallst.com, 4. 247wallst.com, 5. www.tipranks.com, 6. www.reuters.com, 7. www.reuters.com, 8. ir.applieddigital.com, 9. www.reuters.com, 10. www.reuters.com, 11. ir.applieddigital.com, 12. www.globenewswire.com, 13. 247wallst.com, 14. www.reuters.com, 15. www.marketbeat.com, 16. www.trefis.com, 17. www.marketbeat.com, 18. stockanalysis.com, 19. www.tipranks.com, 20. www.trefis.com, 21. ir.applieddigital.com, 22. www.globenewswire.com, 23. ir.applieddigital.com, 24. ir.applieddigital.com, 25. www.nasdaq.com, 26. ir.applieddigital.com, 27. www.globenewswire.com, 28. www.marketbeat.com
