Applied Digital Corporation (NASDAQ: APLD) is living at the intersection of two forces that investors love—and fear: the AI infrastructure boom and the capital markets that must fund it. On December 16, 2025, APLD stock is in the spotlight after a sharp selloff that underscored how quickly sentiment can flip for data center builders whose story depends on leases, construction timelines, and financing terms.
Below is a full, up-to-date round-up of the latest market action, the most relevant company developments, and the key forecasts and analyses circulating as of December 16, 2025.
APLD stock today: the latest move investors are reacting to
Applied Digital shares closed Monday, December 15, 2025 at $22.98, down 17.52% on the day, after trading in a wide range with heavy volume. Investing.com’s historical tape shows an open near $27.86, a high near $27.86, and a low near $22.895, with ~43.53 million shares traded—an eye-catching burst of activity even for a stock known for volatility. [1]
Early Tuesday (Dec. 16), the stock was still choppy in premarket pricing. StockAnalysis showed $22.89 pre-market around 8:16 a.m. ET, while MarketWatch showed $22.75 around 5:22 a.m. ET (delayed quote). [2]
Why Applied Digital shares dropped: “AI infrastructure” sentiment meets valuation gravity
Multiple market commentaries published into Dec. 16 point to a familiar pattern for high-momentum AI-adjacent names: a sudden repricing driven more by risk appetite than by a single new corporate headline.
TipRanks’ Dec. 16 coverage framed Monday’s decline as part of a broader pullback in AI-infrastructure valuations rather than a fresh company-specific disclosure, noting elevated options activity and heavier demand for downside protection after the move. [3]
Zooming out, Reuters Breakingviews has been warning that the biggest swing factor for AI data center developers may be financing costs and tenant creditworthiness, especially when long-dated leases are signed with fast-growing “neo-cloud” intermediaries rather than with cash-rich hyperscalers. In that framework, the market can punish the equity quickly if it senses debt costs rising, lease counterparty risk increasing, or delivery schedules slipping. [4]
In plain English: APLD doesn’t trade like a slow-and-steady landlord yet. It still trades like a high-beta construction-and-financing machine that investors continuously revalue as rates, spreads, and AI sentiment move.
The bull case in one sentence: contracted megawatts turning into contracted cash flows
Applied Digital’s core equity story is that it is building “AI factory” data center campuses where long-term leases—measured in megawatts—translate into long-term contracted revenue.
Two lease arcs matter most:
Polaris Forge 1 (Ellendale, North Dakota): CoreWeave-linked ramp from 100 MW toward 400 MW
A Nasdaq/Zacks analysis published Dec. 5 describes how Applied Digital’s Polaris Forge 1 campus in Ellendale is tied to long-term leasing with CoreWeave, with management citing 15-year terms and ~$11 billion of anticipated contracted lease revenues tied to the ramp. Importantly, the piece notes that lease revenue recognition is expected to begin as the first 100 MW comes online toward the end of calendar 2025, with additional phases following in 2026 and 2027. [5]
On the execution front, Applied Digital reported on Nov. 24, 2025 that it reached “Ready for Service” for the second 50 MW phase at its first 100 MW building at Polaris Forge 1—bringing that building to 100 MW of energized critical IT load—and emphasized that Polaris Forge 1 is part of a 400 MW fully contracted deployment for CoreWeave under long-term leases. [6]
That “energized capacity” milestone matters because it’s the bridge from build story to revenue story.
Polaris Forge 2 (near Harwood, North Dakota): $5B hyperscaler lease and a 1 GW expansion option
Applied Digital’s other major pillar is Polaris Forge 2, where the company announced on Oct. 22, 2025 an approximately 15-year lease with a U.S.-based investment-grade hyperscaler covering 200 MW of critical IT load—about $5 billion of total contracted revenue—plus a right of first refusal for an additional 800 MW, representing the site’s full 1 GW potential. [7]
Reuters also reported the same day that the deal lifted Applied Digital’s total leased capacity across Polaris Forge 1 and 2 to 600 MW. [8]
Applied Digital’s Oct. 22 release added extra detail investors tend to care about in AI-grade facilities: Polaris Forge 2 is projected at 1.18 PUE with near-zero water consumption, and the initial 200 MW is expected to begin coming online in 2026 and reach 200 MW total in 2027 (phased across two buildings). [9]
The financing engine behind the buildout: big capital, very real interest-rate sensitivity
Building power-dense AI data centers is expensive. Applied Digital has been assembling a layered financing stack—preferred equity, secured debt, and credit facilities—to fund its North Dakota campuses.
Macquarie facility: up to $5B preferred equity, with additional draws tied to buildout
In a Nov. 12, 2025 release, Applied Digital said it expected additional funding under its previously disclosed perpetual preferred equity facility of up to $5.0 billion with Macquarie Asset Management, including anticipated additional draws totaling $787.5 million—with $450 million allocated toward Polaris Forge 2 and $337.5 million toward Polaris Forge 1 (subject to conditions including closing the notes offering). [10]
That same release also disclosed a $65 million revolving loan and security agreement with First National Bank of Omaha, with interest at SOFR + 2.75% and secured by the company’s assets (excluding subsidiaries). [11]
$2.35B senior secured notes: large-scale debt to fund Ellendale facilities
Applied Digital announced on Nov. 13, 2025 that its subsidiary APLD ComputeCo LLC priced a $2.35 billion offering of 9.250% senior secured notes due 2030, issued at 97%, with proceeds intended to fund construction of 100 MW and 150 MW data centers (ELN-02 and ELN-03) at the Ellendale campus, repay amounts under a credit agreement, fund debt service reserves, and pay transaction expenses. [12]
From an equity perspective, the tradeoff is straightforward: this kind of debt can accelerate delivery and reduce near-term dilution risk, but it also increases the market’s sensitivity to credit spreads, refinancing assumptions, and any sign of construction delays.
Fitch, for example, stated it expected to rate the proposed senior secured notes ‘BB-(EXP)’ (with a recovery rating noted in its headline excerpt). [13]
The “picks-and-shovels” angle: cooling tech and design choices are part of the moat
While megawatts and leases dominate the model, the AI data center market is increasingly defined by thermal management and power density. Applied Digital has been leaning into that narrative.
On Dec. 2, 2025, the company announced it led a $25 million funding round for Corintis, a firm developing advanced chip-cooling solutions, positioning the move as part of its strategy to improve efficiency and support higher-density AI workloads. [14]
This doesn’t immediately change revenue, but it supports the broader claim that APLD is trying to differentiate on “AI-grade” infrastructure rather than competing purely on square footage.
Analyst forecasts and price targets: bullish ratings, wide target dispersion
On the analyst side, the headline is optimism—but the details vary depending on the data source and which set of analysts is being averaged.
What StockAnalysis shows (as of early Dec. 16 pricing)
StockAnalysis lists Applied Digital with a “Strong Buy” consensus (11 analysts) and a displayed price target of $29.36, while also showing several prominent target levels from major coverage updates in October—such as Needham reiterating/maintaining targets around $41, Roth Capital around $43, and multiple firms moving targets up into the high-30s to $40 area. [15]
What TipRanks highlighted in today’s coverage
TipRanks’ Dec. 16 article states Wall Street remains highly bullish with a Strong Buy consensus (based on 10 Buys in the past three months), and cites an average price target of about $42.78, implying significant upside from post-selloff levels. [16]
A financial-model-based bearish counterpoint (Trefis)
Not all analysis is upbeat. A Trefis note published Dec. 16 argued the stock’s sharp decline and “very high” valuation could leave APLD vulnerable, suggesting $16 as a possible downside scenario in its framework. [17]
How to read this: When price targets spread from “high $20s” to “low $40s,” you’re looking at a market that agrees on the theme (AI infrastructure demand) but disagrees on the discount rate, the execution risk, and how quickly “contracted revenue” becomes “recognized revenue with durable margins.”
Options and volatility: the market is pricing big swings
Options data and commentary around Dec. 16 reinforce the same point: traders expect turbulence.
TipRanks flagged elevated options volume and a shift toward protective puts following the selloff. [18]
Separately, OptionCharts reported APLD options implied volatility around ~111% with substantial options volume on Dec. 16—levels typically associated with large expected daily moves. [19]
For long-only investors, that options backdrop is less about trading tactics and more about a reality check: the market is openly admitting it has low confidence in near-term price stability.
The key risks investors are weighing right now
Applied Digital’s upside narrative is powerful, but the risks are not subtle—and many are “binary” in the sense that small changes in assumptions can have big equity impacts.
- Construction and delivery timelines: Leasing models become more valuable when capacity is delivered on schedule and lease revenue starts flowing. Applied Digital has been highlighting milestones like energizing 100 MW at Polaris Forge 1, but the market will keep pressuring the stock any time it suspects slippage. [20]
- Cost of capital and credit spreads: Reuters Breakingviews specifically laid out how debt costs and tenant credit risk can compress returns for developers, creating a feedback loop where rising perceived risk increases financing costs, which then makes future builds harder to justify. [21]
- Customer concentration and counterparty risk: The company’s contracted capacity and revenue visibility are closely tied to a small number of very large customers/tenants across Polaris Forge campuses, as reflected in reporting and company disclosures around hyperscaler and CoreWeave-linked leasing. [22]
- “Tech stock” expectations vs. “infrastructure company” reality: Applied Digital is selling into the AI boom, but it still has the cash-flow timing of a buildout business—where the market may punish spending before lease revenue scales.
What to watch next after Dec. 16, 2025
If you’re tracking APLD from here, the next catalysts aren’t mysterious—they’re measurable:
- More “Ready for Service” milestones and evidence that additional megawatts are coming online on schedule at Polaris Forge 1 and 2. [23]
- Any new lease announcements (especially investment-grade hyperscaler-style deals) that expand contracted revenue beyond current headline agreements. [24]
- Financing updates that change the implied cost of capital, including any further Macquarie draws or debt-market activity. [25]
- Upcoming earnings timing and expectations: Zacks’ earnings calendar expects the next release around January 13, 2026, with an expected EPS around -0.10 (estimate). [26]
Bottom line on Dec. 16, 2025: Applied Digital stock is being treated as a referendum on AI infrastructure economics. Bulls see long-term contracted megawatts evolving into recurring revenue. Bears see a capital-intensive buildout where valuation can compress quickly if financing costs rise or if timelines wobble.
Either way, APLD is not trading like a sleepy data center REIT. It’s trading like a high-voltage hypothesis about the physical future of AI—one construction milestone, financing term sheet, and macro rate move at a time.
References
1. www.investing.com, 2. stockanalysis.com, 3. www.tipranks.com, 4. www.reuters.com, 5. www.nasdaq.com, 6. ir.applieddigital.com, 7. ir.applieddigital.com, 8. www.reuters.com, 9. ir.applieddigital.com, 10. ir.applieddigital.com, 11. ir.applieddigital.com, 12. ir.applieddigital.com, 13. www.fitchratings.com, 14. ir.applieddigital.com, 15. stockanalysis.com, 16. www.tipranks.com, 17. www.trefis.com, 18. www.tipranks.com, 19. optioncharts.io, 20. ir.applieddigital.com, 21. www.reuters.com, 22. www.reuters.com, 23. ir.applieddigital.com, 24. www.reuters.com, 25. ir.applieddigital.com, 26. www.zacks.com
