Applied Digital Corporation (APLD): A Bull Case Theory

We came across a bullish thesis on Applied Digital Corporation on Value investing subreddit by ProbablyGuinness. In this article, we will summarize the bulls’ thesis on APLD. Applied Digital Corporation's share was trading at $13.95 as of August 4^th. APLD’s forward P/E was 416.67 according to Yahoo Finance.

Applied Digital Corporation (APLD), trading around $13, operates in the rapidly expanding AI infrastructure space, specializing in building and leasing high-performance compute (HPC) data centers. The company recently gained significant momentum following its latest earnings report, which reinforced its long-term growth trajectory.

APLD’s first major lease with CoreWeave was signed only months ago, and negotiations are already underway for a second expansion that would generate approximately $11 billion in revenue over the next 15 years. This rapid expansion underscores CoreWeave’s immediate need for additional capacity and APLD’s ability to deliver at scale.

The company has reduced its data center construction timelines from 24 months to about 12 months, addressing a major concern among skeptics and accelerating revenue realization. APLD’s strategic partnerships with industry leaders like NVIDIA—who also holds a significant stake in the company—along with ABB and strong backing from Macquarie Asset Management, strengthen its positioning.

Although APLD is not yet profitable, its growth potential is anchored by surging demand for AI-driven computing power and its expanding relationships with hyperscalers beyond CoreWeave. These partnerships, combined with shorter construction cycles and a scalable model, create a compelling long-term value opportunity. If execution continues as planned, APLD is positioned to capture significant market share in AI infrastructure, offering an attractive upside for patient investors.

Previously, we covered a bullish thesis on Applied Digital Corporation by DoU92 in December 2024, which highlighted APLD’s pivot toward AI-driven growth, scalable infrastructure, and strong analyst sentiment. The stock has appreciated about 46% since then as expansion plans and partnerships materialized. The thesis still stands with rising AI infrastructure demand. ProbablyGuinness shares a similar view but emphasizes CoreWeave deals and faster construction timelines.

Applied Digital Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held APLD at the end of the first quarter which was 42 in the previous quarter. While we acknowledge the potential of APLD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.