- Blistering Rally: Applied Digital (NASDAQ: APLD) shares have exploded this year on AI-infrastructure hype – up ~200–280% YTD by early Oct 2025 [1] [2] (one report notes a 350% gain by mid-Oct [3]). The stock hit all-time highs (~$26.50 on Oct. 3) amid frenzied buying.
- Q1 Earnings Beat: In the quarter ended Aug. 31, 2025, APLD reported $64.2M revenue (up 84% YoY) vs. ~$50M expected [4], and a loss of only $0.07 per share (better than the $0.13 forecast) [5]. Analysts cheered the beats, sending the stock up 16% on the news [6].
- $11B CoreWeave Deal: APLD’s signature news was expanding its anchor tenant deal with AI-cloud specialist CoreWeave. The two companies added 150 MW to APLD’s North Dakota “Polaris Forge 1” campus lease (now 400 MW total), bringing the 15-year contract value to ~$11 billion in future revenue [7]. This deal – anchored by Nvidia-backed CoreWeave – validates APLD’s pivot from crypto-mining to AI infrastructure.
- Major Funding & Expansion: To build these “AI factory” data centers, APLD tapped big financing. It drew $112.5M from a new $5.0B Macquarie Asset Management facility to complete Polaris Forge 1 (a 400 MW campus designed to scale to 1 GW) [8], and secured $50M from Macquarie Equipment Capital for the second campus (Polaris Forge 2, 280 MW) [9]. In recent months the company raised hundreds of millions via stock and preferred stock offerings to fund growth [10].
- Analyst Buzz: Wall Street is increasingly bullish. About a dozen analysts rate APLD a Buy/Strong Buy, with price targets ranging from the mid-$20s up to $56 [11] [12]. (Roth Capital lifted its target to $56 on the Q1 report [13].) However, some note the stock’s run is ahead of fundamentals: the consensus 12-month target (~$25) sits below recent prices [14]. Simply Wall St. estimates a “fair value” around $27 (implying ~20% downside) given current forecasts [15].
- Business Niche: Applied Digital “designs, builds, and operates high-performance, sustainably engineered data centers” for AI, cloud and blockchain workloads [16]. Its Polaris Forge campuses use advanced liquid cooling and cheap North Dakota power to run GPU-heavy AI compute (one campus can grow to 1 GW load) [17]. CEO Wes Cummins calls APLD a “modern-day picks and shovels” play on the AI boom [18] – an era where hyperscalers are expected to invest $350 billion this year alone [19]. Industry experts note that large-scale data-center capacity is becoming scarce, creating a “huge opportunity” for players like APLD [20].
Business & Market Context
Applied Digital (APLD) started as a crypto-hosting company but has aggressively pivoted into AI and cloud infrastructure. Its flagship “Polaris Forge” projects in North Dakota are purpose-built AI data-center campuses: ultra-efficient facilities cooled by closed-loop liquid systems (Design PUE ~1.18) and powered by abundant local hydro power. These campuses will serve “hyper-scale” AI workloads, primarily training large language models and other machine learning tasks. As Motley Fool explained, APLD “designs, builds, and operates high-performance, sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking, and blockchain workloads.” [21]. In practice, the company is effectively selling “digital real estate” to the AI economy, with multi-year leases that guarantee revenue.
After years of modest growth, this positioning clicked when hyperscale cloud customers began hunting GPU capacity. In late Aug. 2025, APLD finalized a third 15-year lease with CoreWeave, adding 150 MW at Polaris Forge 1. The added capacity brings CoreWeave’s footprint to 400 MW and locks in roughly $11 billion of contracted revenue over the term [22]. (For context, CoreWeave itself—once a crypto miner turned AI-cloud provider—recently inked massive deals with Meta and others; its partnership underscores APLD’s credibility.) Applied Digital’s CEO notes that with hyperscale players pouring hundreds of billions into AI, the company is in “a prime position to serve as the modern-day picks and shovels of the intelligence era” [23] [24]. In short, APLD is betting that building new AI-specific data centers will be enormously lucrative.
Blowout Earnings & the $11B CoreWeave Expansion
On Oct. 9, 2025, Applied Digital reported fiscal Q1 (Aug. 31) results that crushed estimates, cementing the stock’s surge. Revenue hit $64.2 million, an 84% increase year-over-year, versus roughly $50M forecast [25]. APLD attributed most of the jump to one-time HPC hosting fees as it fit out new facilities. Even so, the bottom line improved: GAAP loss per share was $0.11 (about $0.07 adjusted) – much better than the $0.13 loss analysts expected [26]. Crucially, the company simultaneously announced the CoreWeave expansion: the 150 MW add-on pushes the Polaris Forge 1 deal to ~$11 billion in total revenue [27].
Investors reacted strongly. The day after earnings, APLD stock vaulted another 16%, reflecting both the earnings beat and the deal news [28]. By week’s end, the stock had reached new highs, and year-to-date gains exceeded 350% [29] according to The Tech Buzz (others cite ~280% by mid-Oct [30] [31]). Analysts are now modeling steep growth: one source notes Wall Street expects Q2 revenue ~$76M [32], and major brokerages are raising earnings and expansion plans. As an industry analyst put it, APLD’s results “show how desperate tech giants are for AI computing power – and how much they’re willing to pay for it.” [33]. In all, Applied Digital proved its AI strategy is paying off in sales and bookings.
Stock Rally & Valuation
The market has clearly bid up APLD on these developments. After languishing at penny-stock levels in early 2024, the share price has exploded in 2025. Ts2.Tech notes that between Sept. 30 and Oct. 2 alone, APLD jumped about 19% (from ~$22 to ~$27) on rumors of new hyperscaler deals [34]. It reached ~$26.53 by Oct. 3, “marking a record high” and capping a >200% YTD rally [35]. On Oct. 9 (pre-earnings) the stock closed near $29.30, then briefly spiked above $32 in after-hours trading after the blowout Q1 report [36].
By Oct. 13 the stock was trading in the upper $20s/low $30s (roughly where core targets lie). Current market data shows APLD around the high-$20s as of this writing (a stark rise from ~$6 at the start of 2025). However, this surge makes APLD very richly valued on traditional metrics. Motley Fool notes the stock’s P/S ratio is ~38 [37], far above normal levels for the sector. In other words, much of the value is based on hoped-for future revenue. As one Motley Fool commentator put it, “Applied Digital certainly looks like its shares are overvalued… it’s a lot for a company that isn’t yet profitable” [38].
Analyst Ratings & Targets
Most analysts remain optimistic on the thesis despite the froth. According to Ts2.Tech, “roughly a dozen” firms have Buy/Strong-Buy ratings on APLD [39]. Consensus price targets span a wide range. Many average in the mid-$20s, but some big upbounds exist: for example, Roth Capital recently lifted its 12-month target to $56 (from $43) [40], citing APLD’s accelerating AI build-out and anchor deals. By contrast, others see more modest upside; one analysis pegs fair value at about $27 (21% below current levels) [41], while a consensus target around $25 sits below the share price [42]. In other words, Street sentiment is bullish, but not unanimous.
Importantly, analysts highlight both the upside and the risks. The expansion of Polaris Forge (to 600 MW by 2027 across two campuses) suggests multibillion-dollar revenue potential. Management’s goal of roughly $500M annual NOI from Polaris Forge 1 (and $1B operating profit by ~2030) implies enormous growth [43]. At the same time, experts caution that execution must be flawless: APLD’s future profits will largely depend on these new hyperscaler tenants. One report notes that “one anchor client (CoreWeave) will account for much of APLD’s future revenue,” so any delay or pricing concessions could dent growth [44]. Other analysts worry the stock has already priced in too much hype – as Ts2.Tech observes, APLD’s 52-week range now spans from ~$2.55 to over $30, indicating extreme volatility (beta >6) [45].
Financing, Expansion & Forecasts
Applied Digital is aggressively plowing capital into growth. As detailed above, it has secured hundreds of millions in new funding (stock offerings, preferred equity, debt facilities) to build data centers. The Macquarie financing is key: the initial $112.5M draw will complete Polaris Forge 1 (enough to provide 400 MW of capacity) [46], and further draws will fund ongoing construction. Polaris Forge 2 (near Harwood, ND) is planned as a $3.0B, 280 MW campus, with two 150 MW buildings. Groundbreaking occurred in late 2025, with 200 MW planned to be online by 2026 and full build-out by 2027 [47]. In total, by 2027 APLD aims to have 600 MW leased across the two sites. (For scale, 600 MW could power a small city – all dedicated to AI.)
These expansion plans underpin a very steep revenue trajectory. In FY2025 (ending May 31, 2025), APLD did $144.2M in sales [48]. The addition of CoreWeave’s $11B deal plus new projects suggests revenues could several-fold in coming years. Indeed, analysts are raising their forecasts: Wall Street now models APLD cruising to roughly $76M+ revenue next quarter [49] and even higher thereafter. If these projects come online as planned and major hyperscalers (e.g. Amazon, Google, Microsoft) commit capacity, the revenue runway is huge. This is why some bullish forecasts see APLD justifying its eye-popping valuation – an essentially captive AI-infra play.
Risks & Legal Matters
No stock this hot comes without caveats. Investors should be aware that Applied Digital’s rise attracted scrutiny. In 2023, short-seller reports (e.g. Wolfpack Research) accused APLD of exaggerating its AI pivots and questioned related-party deals. A class-action lawsuit was filed over alleged misstatements about profitability and governance. The company has firmly denied any wrongdoing and insists its recent mega-deals vindicate its story [50]. Still, these legal and reputational overhangs continue.
More prosaically, APLD’s business is highly capital-intensive. It carries significant debt (~$700M end of Q1 plus new financings) and must keep fundraising to build these campuses. Heavy spending can strain the balance sheet, potentially diluting shareholders. There’s also execution risk: building large data centers on time, securing power availability, and filling them with tenants are complex tasks. Industry analysts point out that if power lines or permits face delays, or if the cryptocurrency market tumbles (reducing demand for its legacy hosting), APLD’s profits could suffer.
Finally, at over $25 per share, Applied Digital trades at a premium even among high-flying techs. Several experts warn that any pullback in the AI hype cycle could trigger a sharp correction. One commentator noted that despite the rally, “the market’s perception of the business” hasn’t fundamentally changed – the stock’s run is fueled by momentum and sentiment [51]. In plain English, investors are betting on a best-case scenario.
Outlook and Conclusion
In sum, as of mid-October 2025 Applied Digital sits at the intersection of the AI boom and data-center crunch. Its recent $11B CoreWeave deal and $3B Polaris Forge 2 plan exemplify the massive growth path it has charted. For long-term holders, management’s vision of $1 billion in annual operating profit within five years [52] is the prize that justifies today’s prices. Many analysts remain bullish on that vision – for example, Roth Capital calls APLD’s roadmap “industry-leading” in contracted capacity [53].
However, the stock is no sure thing. Valuations are lofty and hinge on perfect execution and continued AI investment. As Nasdaq (Motley Fool) commentator Selena Maranjian puts it, if you believe in the long view you could “do just fine buying in now,” but a pullback is possible given the steep price [54]. Others suggest dollar-cost averaging or watching for dips.
For now, Applied Digital is widely seen as one of Wall Street’s hottest “picks and shovels” plays on AI. Key things to watch include upcoming earnings (the next report in Jan 2026), new lease announcements with hyperscalers, and the pace of campus build-outs. If contracts continue piling up and execution stays on track, APLD’s bullish forecast (prices $30–$50+) could be realized. But if growth stalls or capital costs balloon, the shares could give back much of their recent gains.
Sources: Company filings and press releases [55] [56] [57]; Nasdaq (Motley Fool) analysis [58]; TechStock²/ts2.tech articles [59] [60]; The Tech Buzz [61] [62]; financial news (TipRanks/The Fly) [63] [64]. These sources detail APLD’s latest deals, finances, and market commentary. Their figures and expert quotes underpin this analysis.
References
1. ts2.tech, 2. ts2.tech, 3. www.techbuzz.ai, 4. www.techbuzz.ai, 5. www.techbuzz.ai, 6. www.techbuzz.ai, 7. www.techbuzz.ai, 8. www.nasdaq.com, 9. ir.applieddigital.com, 10. ts2.tech, 11. ts2.tech, 12. www.tipranks.com, 13. www.tipranks.com, 14. ts2.tech, 15. simplywall.st, 16. www.nasdaq.com, 17. ts2.tech, 18. ir.applieddigital.com, 19. ir.applieddigital.com, 20. ts2.tech, 21. www.nasdaq.com, 22. www.techbuzz.ai, 23. www.techbuzz.ai, 24. ir.applieddigital.com, 25. www.techbuzz.ai, 26. www.techbuzz.ai, 27. www.techbuzz.ai, 28. www.techbuzz.ai, 29. www.techbuzz.ai, 30. ts2.tech, 31. ts2.tech, 32. www.techbuzz.ai, 33. www.techbuzz.ai, 34. ts2.tech, 35. ts2.tech, 36. ts2.tech, 37. www.nasdaq.com, 38. www.nasdaq.com, 39. ts2.tech, 40. www.tipranks.com, 41. simplywall.st, 42. ts2.tech, 43. ir.applieddigital.com, 44. ts2.tech, 45. ts2.tech, 46. www.nasdaq.com, 47. ts2.tech, 48. ts2.tech, 49. www.techbuzz.ai, 50. ts2.tech, 51. ts2.tech, 52. ir.applieddigital.com, 53. www.tipranks.com, 54. www.nasdaq.com, 55. ir.applieddigital.com, 56. www.nasdaq.com, 57. ir.applieddigital.com, 58. www.nasdaq.com, 59. ts2.tech, 60. ts2.tech, 61. www.techbuzz.ai, 62. www.techbuzz.ai, 63. www.tipranks.com, 64. www.tipranks.com
