Applied Digital Corporation (APLD): A Bull Case Theory

We came across a bullish thesis on Applied Digital Corporation on Value investing subreddit by GloriousLebron. In this article, we will summarize the bulls’ thesis on APLD. Applied Digital Corporation's share was trading at $19.83 as of September 17th. APLD’s forward P/E was 526.32 according to Yahoo Finance.

Applied Digital (APLD) has rapidly transformed from a speculative small cap into a serious player in AI infrastructure, with its stock price surging from about $3 in April to nearly $20 today. The momentum is not mere market hype but underpinned by long-term contracts and a credible execution track record. Central to this story is CoreWeave, a fast-growing AI infrastructure company backed by NVIDIA, which signed two 15-year leases with APLD worth $7 billion.

CoreWeave later expanded its commitment with another 150 MW lease, bringing the total to 400 MW and raising APLD’s backlog to approximately $11 billion in contracted revenue. This revenue stream is multi-year, locked in, and set to ramp as facilities come online. APLD has already demonstrated its ability to scale rapidly, constructing 480 MW in the past 18 months. Its current flagship project, Polaris Forge 1 in North Dakota, is a 400 MW facility with the first 100 MW expected to go live in Q4 2025, another 150 MW in mid-2026, and the final 150 MW in 2027.

The company also boasts a 1.4 GW future pipeline, supported by financing from Macquarie, highlighting its ability to expand aggressively. Efficiency is a competitive edge, with direct chip cooling developed in collaboration with Dell, low-cost energy supported by North Dakota’s favorable climate, and power usage effectiveness near 1.18, giving APLD a structural cost advantage.

Energy security is equally critical, and APLD has already locked in long-term renewable and utility contracts in Texas and North Dakota to support its data centers. With management signaling advanced negotiations with a major North American hyperscaler, additional contracts appear likely. Together, these elements make APLD one of the most compelling emerging plays on AI infrastructure buildout, offering investors exposure to a company with contracted revenue, secured energy supply, and a fast-expanding capacity pipeline.

Previously we covered a bullish thesis on Applied Digital Corporation (APLD) by DoU92 in December 2024, which highlighted the company’s pivot to AI-driven growth, rapid data center expansion, and scalable HPC infrastructure. The company's stock price has appreciated approximately by 108% since our coverage. The thesis still stands as long-term contracts and operational execution underpin growth. GloriousLebron shares a similar bullish view but emphasizes major CoreWeave leases, secured energy, and an aggressive buildout pipeline.

Applied Digital Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held APLD at the end of the second quarter which was 26 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.