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Applied Digital Corporation (APLD)
NASDAQ:APLD
US Market

Applied Digital Corporation (APLD) AI Stock Analysis

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Applied Digital Corporation

(NASDAQ:APLD)

Rating:58Neutral
Price Target:
$14.50
▲(11.37%Upside)
The overall stock score for Applied Digital Corporation is primarily influenced by strong technical momentum and positive corporate events, which are offset by significant financial performance concerns and valuation challenges. The earnings call provides a balanced outlook with promising partnerships but also highlights ongoing financial losses.
Positive Factors
Market Stability
The deal with CoreWeave is expected to end the frequent changes in price targets that have affected Applied Digital, providing stability to its valuation.
Revenue Growth
Applied Digital announced a 15-year, $7B deal with CoreWeave for 250MW in Ellendale, ND, which significantly impacts the company's future revenue growth.
Strategic Partnerships
Collaboration with a neocloud HPC provider like CoreWeave is seen as advantageous over traditional hyperscalers, due to their agility and responsiveness to market trends.
Negative Factors
Interest Costs
CoreWeave is not yet defined as a hyperscaler and doesn’t carry the same credit rating, which will likely result in higher interest costs for the construction loan and may require a different structure for the infrastructure equity than the previously announced deal with Macquarie.
Investor Concerns
Investor sentiment soured primarily because of expectations around HPC and the limited details on lease timeline.
Sales Impact
The discontinuation of Applied Digital's cloud service business will result in a $70M-plus impact on FY26 sales, which the new CoreWeave deal does not fully offset.

Applied Digital Corporation (APLD) vs. SPDR S&P 500 ETF (SPY)

Applied Digital Corporation Business Overview & Revenue Model

Company DescriptionApplied Digital Corporation designs, develops, and operates digital infrastructure solutions and cloud services high-performance computing (HPC) and artificial intelligence industries in North America. It operates through three segments: Data Center Hosting Business, Cloud Services Business, and HPC Hosting Business. The company offers infrastructure services to crypto mining customers; and GPU computing solutions for critical workloads related to AI, machine learning, and other HPC tasks. It also engages in the designing, constructing, and managing of data centers to support HPC applications. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.
How the Company Makes MoneyApplied Digital Corporation generates revenue through its data center services by leasing high-performance computing capacity to clients. The company earns money by offering space, power, and cooling solutions to businesses that need robust infrastructure for cloud computing, artificial intelligence, and other intensive computational tasks. Revenue streams are primarily driven by long-term contracts with enterprises, and the company may also engage in partnerships that enhance the capacity and efficiency of its data centers, contributing to its earnings.

Applied Digital Corporation Earnings Call Summary

Earnings Call Date:Apr 14, 2025
(Q3-2025)
|
% Change Since: 142.46%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Neutral
The earnings call revealed robust revenue growth and significant financial support from major institutions, indicating positive business momentum. However, this was tempered by a net loss, challenges in the Cloud Services segment, increased interest expenses, and margin compression. While the construction progress and financial partnerships are promising, the financial losses and operational challenges present a balanced outlook.
Q3-2025 Updates
Positive Updates
Revenue Growth
Revenues for the fiscal third quarter of 2025 were $52.9 million, up 22% over the prior comparable period, driven by growth in the Cloud Services Business.
Significant Financial Partnerships
Secured a $5 billion potential investment from Macquarie Asset Management and a $375 million financing arrangement with Sumitomo Mitsui Bank Corporation.
Adjusted EBITDA Improvement
Adjusted EBITDA increased 878% to $10 million.
Construction Progress
Construction of the Ellendale campus remains on schedule, with the first building expected to be ready for service in Q4 2025.
Negative Updates
Net Loss
Net loss attributable to common stockholders was $36.1 million or $0.16 per basic and diluted share.
Cloud Services Revenue Decline
Cloud Services Business revenue declined sequentially from the last quarter due to a shift from reserve contracts to an on-demand model.
Increased Interest Expenses
Interest expense increased by $4.1 million to $8.9 million due to finance leases and interest-bearing loans.
Margin Compression
Experienced margin compression in the Data Center Hosting Business due to seasonal fluctuations in power costs.
Company Guidance
During Applied Digital's fiscal third quarter 2025 conference call, the company provided several key metrics and updates regarding its operations and strategic direction. The Data Center Hosting Business is currently operating 286 megawatts of fully contracted capacity across two locations in North Dakota, with Bitcoin prices remaining strong, positively impacting customer sentiment. In the HPC Hosting segment, significant milestones included a transaction with Macquarie Asset Management, allowing for a potential $5 billion investment in next-generation data centers, and a $375 million financing arrangement with Sumitomo Mitsui Bank Corporation. The Ellendale campus is expected to begin generating revenue in Q4 2025, with construction on subsequent buildings underway. The Cloud Services Business contributed $17.8 million in revenue, although it faced a sequential decline due to a shift to an on-demand model. Cost of revenues increased to $49.1 million, and SG&A expenses decreased to $22.7 million. Adjusted EBITDA saw a substantial increase of 878% to $10 million. The company ended the quarter with $261.2 million in cash and $689.1 million in debt. Additionally, the board is reviewing strategic options for the Cloud Services Business to potentially lower the cost of capital and align with future strategic goals.

Applied Digital Corporation Financial Statement Overview

Summary
Applied Digital Corporation shows strong revenue growth but struggles with profitability, high leverage, and negative cash flow, indicating financial instability.
Income Statement
22
Negative
Applied Digital Corporation has shown significant revenue growth, increasing from $8.5 million in 2022 to $221.2 million in TTM (Trailing-Twelve-Months). However, the company is facing substantial profitability challenges, with negative EBIT and net income margins. The gross profit margin is low, indicating cost management issues.
Balance Sheet
30
Negative
The company has a high debt-to-equity ratio, indicating significant leverage, which poses a financial risk. Stockholders' equity has improved over the years, but the return on equity remains negative due to losses. The equity ratio suggests moderate equity financing, but liabilities are high relative to assets.
Cash Flow
18
Very Negative
Applied Digital Corporation's cash flow situation is concerning, with negative free cash flow and a high operating cash flow deficit in TTM (Trailing-Twelve-Months). The free cash flow to net income ratio indicates cash flow issues despite financing activities supporting liquidity.
Breakdown
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
221.19M165.57M55.39M8.55M0.000.00
Gross Profit
12.34M17.23M11.00M-957.00K-1.00K0.00
EBIT
-61.98M-99.02M-44.05M-20.90M-332.00K-263.00K
EBITDA
-46.07M-43.38M-36.88M-20.71M-331.00K0.00
Net Income Common Stockholders
-243.28M-149.27M-45.61M-22.49M-804.00K-263.00K
Balance SheetCash, Cash Equivalents and Short-Term Investments
11.96M3.34M43.57M38.80M11.75M0.00
Total Assets
63.49M762.87M263.96M119.98M15.05M0.00
Total Debt
1.22M427.81M91.81M13.54M2.13M1.90M
Net Debt
-10.74M424.47M48.24M-25.25M-9.62M1.90M
Total Liabilities
72.10M638.04M194.28M40.74M17.64M2.02M
Stockholders Equity
-8.61M124.83M59.52M72.26M-2.58M-2.02M
Cash FlowFree Cash Flow
-468.67M-128.01M-72.54M-59.12M-3.38M0.00
Operating Cash Flow
-156.36M13.79M58.73M-872.00K-83.00K0.00
Investing Cash Flow
-515.60M-172.44M-132.09M-45.87M-3.30M0.00
Financing Cash Flow
892.20M146.76M70.63M81.29M15.13M0.00

Applied Digital Corporation Technical Analysis

Technical Analysis Sentiment
Positive
Last Price13.02
Price Trends
50DMA
6.32
Positive
100DMA
7.06
Positive
200DMA
7.32
Positive
Market Momentum
MACD
1.90
Negative
RSI
75.67
Negative
STOCH
77.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APLD, the sentiment is Positive. The current price of 13.02 is above the 20-day moving average (MA) of 8.33, above the 50-day MA of 6.32, and above the 200-day MA of 7.32, indicating a bullish trend. The MACD of 1.90 indicates Negative momentum. The RSI at 75.67 is Negative, neither overbought nor oversold. The STOCH value of 77.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APLD.

Applied Digital Corporation Risk Analysis

Applied Digital Corporation disclosed 85 risk factors in its most recent earnings report. Applied Digital Corporation reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Our anticipated partnership with MAM is subject to closing conditions and no assurance can be given that those closing conditions will be met and the transactions contemplated by the Unit Purchase Agreement will be consummated. Q4, 2024
2.
Although we are concurrently in negotiations with multiple hyperscalers for a lease of the HPC Ellendale Facility, we have not yet entered into any definitive lease documentation with any one of these parties and there can be no assurance that we will be able to do so in the future on terms favorable to us or at all. Q4, 2024
3.
We plan to lease these purpose-built data centers to one or more hyperscalers. We are concurrently negotiating and working closely with multiple hyperscalers on lease terms for the same premises. Q4, 2024

Applied Digital Corporation Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$1.49B28.0111.35%14.05%17.90%
69
Neutral
$1.28B364.180.63%20.97%
66
Neutral
$1.03B92.892.42%18.72%347.70%
64
Neutral
$12.86B9.797.78%16985.65%12.28%-7.82%
AIAI
60
Neutral
$3.44B-33.73%25.27%4.68%
58
Neutral
$3.12B-78.94%53.70%-72.91%
VYVYX
54
Neutral
$1.56B-19.49%-50.48%-15.75%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
APLD
Applied Digital Corporation
13.02
8.89
215.25%
VYX
NCR Voyix
11.80
-0.94
-7.38%
GDYN
Grid Dynamics Holdings
12.14
2.39
24.51%
AI
C3ai
25.86
-5.50
-17.54%
FLYW
Flywire
10.27
-6.77
-39.73%
TASK
TaskUs
16.68
2.16
14.88%

Applied Digital Corporation Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Applied Digital Announces Datacenter Leases and Warrant Issuance
Neutral
Jun 2, 2025

On June 2, 2025, Applied Digital Corporation announced the execution of datacenter leases and the issuance of an initial warrant. The company is considering an ‘at the market’ offering of up to $200 million in common stock to fund growth capital expenditures and other corporate needs, although the decision to proceed is contingent on market conditions.

The most recent analyst rating on (APLD) stock is a Buy with a $10.00 price target. To see the full list of analyst forecasts on Applied Digital Corporation stock, see the APLD Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Applied Digital Plans Sale of Cloud Services Unit
Neutral
May 30, 2025

On February 26, 2025, Applied Digital Corporation‘s Board of Directors approved the negotiation for the potential sale of its Cloud Services Business, which was classified as ‘held for sale’ on April 10, 2025. This strategic move, reflecting a shift in the company’s operations, will be reported as discontinued operations starting from the fourth quarter of the fiscal year ending May 31, 2025, and aims to assist investors in understanding its financial impact.

The most recent analyst rating on (APLD) stock is a Buy with a $10.00 price target. To see the full list of analyst forecasts on Applied Digital Corporation stock, see the APLD Stock Forecast page.

Private Placements and Financing
Applied Digital Secures $150M Preferred Equity Agreement
Positive
May 1, 2025

On April 30, 2025, Applied Digital Corporation entered into a preferred equity purchase agreement with institutional investors, allowing the company to sell up to $150 million of Series G Convertible Preferred Stock over a 36-month period. This arrangement is intended to fund the development of their Ellendale High Performance Computing Campus and other corporate needs, providing flexibility in capital access without mandatory draw requirements. The stock is convertible into common shares under specific conditions, with protective measures like beneficial ownership caps and redemption rights in place to ensure compliance with Nasdaq rules.

Executive/Board Changes
Applied Digital Approves Performance Stock Units for Executives
Neutral
Apr 2, 2025

On March 27, 2025, Applied Digital Corporation’s board approved performance stock unit grants for key executives under its 2024 Omnibus Equity Incentive Plan. These grants, which are subject to performance-based vesting conditions, include 1,600,000 units for CEO Wes Cummins, 245,000 units for CFO Saidal Mohmand, and 600,000 units for COO Laura Laltrello, highlighting the company’s commitment to aligning executive incentives with performance goals.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.