Applied Digital is a speculative, cash-burning data-center services company with improving earnings surprises and an industry-leading growth rank, but 59% customer concentration, a 65% drawdown, weak quality and 24% short interest dominate the risk profile.
Thesis pillars
- Customer Concentration Risk↓Deteriorating
- Cash Burning Low Quality→Stable
- Industry Growth Leader→Stable
- +2 more pillars — see the Why tab for full reasoning
Pillars as of Nov 1, 2026, based on the 10-K filed Jul 29, 2026
Applied Digital Corporation (APLD) Stock Analysis
Falling Knife setup
Technology · Information Technology Services
Sell if holding. Engine safety override at $16.61: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.7/10. Specifically: High short interest: 24%; Below-average business quality; Negative price momentum.
Applied Digital designs, builds and operates large-scale data centers for AI and high-performance computing, leasing capacity to CoreWeave and investment-grade hyperscalers under 15-year take-or-pay leases. As of May 31, 2026 it had about 1,410 MW of contracted critical IT load... Read more
Sell if holding. Engine safety override at $16.61: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.7/10. Specifically: High short interest: 24%; Below-average business quality; Negative price momentum. Chart setup: Death cross, below all MAs, RSI 39, MACD bearish. Score 4.7/10, moderate confidence.
Passes 6/9 gates (clean insider activity, no SEC red flags, news events none recent, earnings proximity 62d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and death cross (50MA < 200MA). Suitability: speculative.
About Applied Digital Corporation
About Applied Digital Corporation
Applied Digital recorded a $231.1 million net loss in fiscal 2025 while building out roughly 286 MW of Data Center Hosting and HPC Hosting capacity in Jamestown and Ellendale, North Dakota. Data Center Hosting, which rents power-based space to crypto mining customers, generated 100% of fiscal 2025 continuing-operations revenue, with a single customer accounting for 93%. HPC Hosting signed its first leases - two agreements totaling 250 MW with one customer - in May 2025.
Applied Digital earns revenue by leasing energized data center capacity: the Data Center Hosting Business rents space sized to customers' power requirements to crypto mining operators under a five-year contract with roughly 2.5 years remaining, while the HPC Hosting Business signs long-term leases - roughly 15 years - to host GPU clusters and other high-performance compute infrastructure for AI customers, with the first two Polaris Forge 1 buildings (100 MW and 150 MW) leased in May 2025 for a combined 250 MW. The company funds capital-intensive construction through debt, including the February 2025 SMBC Credit Agreement, an Ellendale loan from Starion Bank, and a Cornerstone Bank loan, alongside equity issuances and convertible notes. A separate Cloud Services Business, which rents third-party co-location space and cloud computing equipment to AI and machine-learning developers, was classified as held for sale in fiscal 2025 and reported in discontinued operations. Competitors include Digital Realty, Equinix, NTT, Bitdeer, and Riot Platforms.
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Beyond its per-segment customer concentration, Applied Digital's physical footprint is itself concentrated: both operating sites, and the entire Polaris Forge 1 buildout, sit in North Dakota, exposing the company to that state's regulatory framework, market conditions, and natural-disaster risk with no operational diversification to fall back on. The 10-K separately flags that recently imposed U.S. tariffs on imported electrical infrastructure components and construction materials - inputs the company says it cannot yet predict the full effect of - could delay completion of the HPC and AI facilities the business depends on for its next stage of revenue growth, compounding the single-state concentration with an import-cost variable outside the company's control.
See also: Technology · Information Technology Services
From Applied Digital Corporation's most recent 10-K filing, extracted October 18, 2026.
Recent developments
updated Nov 5, 2026Recent Developments — Applied Digital Corporation
Latest news
- NEWS Jim Cramer Warns Friday's Jobs Report Could 'Repeal' Midterm Rally, Says Elections 'Did Not Upend' Business Cycle: ‘I He — benzinga Nov 5, 2026 neutral
- NEWS Forget Nvidia: Why Samsung, TSMC, and Micron Just Generated 'More Free Cash Flow... Than Any Other Listed US Company' — benzinga Nov 4, 2026 positive
- NEWS CRWV, APLD, IREN Stocks Slip as Brad Gerstner Warns Democratic Midterm Gains Could Put 10–15 GW of AI Data Center Capaci — benzinga Nov 4, 2026 negative
- NEWS Applied Digital Stock Jumps: What's Going On? — benzinga Nov 3, 2026 positive
- NEWS Applied Digital CEO Provides Operational and Strategic Update — fiscal.ai Nov 2, 2026 neutral
Latest item Nov 5, 2026 · Generated 2026-11-05T12:04:08Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHCustomerone customer 59% of total revenue59%10-K Item 1A: 'this business segment was comprised of one customer accounting for 59% of our total revenue from continuing operations.'
- MEDIUMCustomerone customer 25% of revenue25%10-K Item 1A: 'this business segment was comprised of one customer accounting for 25% of our revenue from continuing operations.'
- MEDIUMCustomerCoreWeave leases at Polaris Forge 110-K Item 1: 'bringing the total contracted capacity at Polaris Forge 1 under our CoreWeave leases to 400 MW'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
3 floor-breakers
Hyper-growth tech sacrificing current profitability for scale. Floor tripped because model treats negative margins uniformly; the growth dimension tells the other half of the story.static
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Engine safety override at $16.61: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.7/10. Specifically: High short interest: 24%; Below-average business quality; Negative price momentum. Chart setup: Death cross, below all MAs, RSI 39, MACD bearish. Prior stop was $15.58. Score 4.7/10, moderate confidence.
Resistance target: $23.94 (+44.1% upside). Prior stop was $15.58. Stop-loss: $15.58.
Concentration risk — Customer: one customer 59% of total revenue (59.0%); DATA_ISSUE: analyst_target_implausible (raw $60.94 vs price $16.61 — ratio 3.7×). Rejected, falling back to technical TP.; Quality below floor (2.0 < 4.0).
Applied Digital Corporation trades at a P/E of N/A (forward -21.2). TrendMatrix value score: 6.4/10. Verdict: Sell.
24 analysts rate APLD, with a consensus score of 4.1/5. 16 analysts publish price targets averaging $61.
What does Applied Digital Corporation do?Applied Digital designs, builds and operates large-scale data centers for AI and high-performance computing, leasing...
Applied Digital designs, builds and operates large-scale data centers for AI and high-performance computing, leasing capacity to CoreWeave and investment-grade hyperscalers under 15-year take-or-pay leases. As of May 31, 2026 it had about 1,410 MW of contracted critical IT load and roughly $36.2 billion of contracted revenue, with about 100 MW operating. A legacy blockchain hosting line serves a single crypto mining customer and is expected to shrink.