APLD Stock New Highs, Up 70% Monthly: Will the Bubble Burst as Valuation Doubts Loom?
Applied Digital (NASDAQ: APLD) is enjoying a powerful rally, fueled by stronger-than-expected earnings and bold new AI infrastructure...
Quick overview
- Applied Digital's stock surged to $17.60, marking a 70% gain in just one month after strong earnings and new AI infrastructure plans.
- The company unveiled a $3 billion AI data facility project, Polaris Forge 2, set to begin operations in 2026 and expected to generate significant revenue.
- Despite impressive growth projections, Applied Digital's high valuation raises concerns about potential stock pullbacks.
- Analysts are optimistic about the company's future, projecting nearly 47% annual revenue growth, but caution investors about the risks associated with its current valuation.
Applied Digital (NASDAQ: APLD) is enjoying a powerful rally, fueled by stronger-than-expected earnings and bold new AI infrastructure plans, pushing its stock to fresh highs.
Stock Breaks Out to New Highs
Applied Digital’s shares climbed to $17.60 today, notching a fresh record after closing July near $10—a 70% gain in just one month. The long-standing resistance at $15 has been cleared, and analysts are now eyeing a potential test of $20.
APLD Chart Daily – Heading Toward $20?
While some speculate about a return to the 2021 highs above $34, that scenario looks ambitious for now. Despite the momentum, valuation concerns remain, with APLD carrying a Value Score of F and trading at a forward Price-to-Sales ratio of 13.5x versus the industry average of 3.5x.
AI Terminator Megaproject Captures Attention
Fueling the excitement is Applied Digital’s unveiling of Polaris Forge 2, a massive $3 billion AI-focused data facility near Harwood, North Dakota, which raises eyebrows regarding the Terminator movie type of facilities. Slated to begin operations in 2026 and reach full capacity by early 2027, the project will generate 280 megawatts, span 900 acres, and employ over 200 people.
The facility will be powered by Cass County Electric Cooperative and follows the earlier success of Polaris Forge 1. Applied Digital also revealed advanced talks with a U.S. investment-grade hyperscaler to anchor the new site—potentially ensuring stable long-term revenues.
Earnings and Contracts Strengthen Momentum
Applied Digital recently stunned investors with an 81% earnings surprise, posting a narrower Q4 net loss of $0.03 per share versus Wall Street’s forecast of a $0.14 loss. Cost discipline and operational efficiency were highlighted as key drivers. Further momentum came as CoreWeave Inc. (NASDAQ: CRWV) expanded its contracted IT load capacity with Applied Digital to 400 MW, boosting the total contract value to $11 billion and adding an estimated $4 billion in future revenue.
Outlook: Growth Meets Valuation Risks
The combination of ambitious infrastructure projects, long-term leasing agreements, and soaring AI demand has analysts projecting 46.9% annual revenue growth and a path to profitability within three years. However, the stock’s steep valuation premium raises the risk of a pullback if expectations cool. Investors now face a choice between riding the momentum or bracing for a possible reversal.Â
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