Assessing Applied Digital (APLD) Valuation After New Hyperscaler Leases and Polaris Forge Milestones
Applied Digital (APLD) has been in the spotlight after locking in long term leases with major hyperscalers, fully energizing its first Polaris Forge 1 building, and backing Corintis for next gen chip cooling.
See our latest analysis for Applied Digital.
Those execution wins have not gone unnoticed, with a 90 day share price return of 124.44 percent and a year to date share price return of 300.26 percent signaling powerful momentum. The 1 year total shareholder return of 192.60 percent underlines how quickly sentiment has flipped toward Applied Digital as an AI infrastructure play.
If you are weighing how to position around the AI data center build out, it is worth exploring other high growth tech names via high growth tech and AI stocks as potential complements or alternatives.
With the stock up several hundred percent and still trading at roughly a 40 percent discount to the average analyst target, investors now face a pivotal question: Is Applied Digital still mispriced, or is the market already discounting years of AI-driven growth?
Most Popular Narrative Narrative: 28.6% Undervalued
With the narrative fair value at 43.70 dollars against a last close of 31.22 dollars, the valuation case hinges on how fast AI data center economics scale.
The company's focus on locating campuses in the Dakotas enables access to abundant, low cost, and renewable power, with optimized liquid cooling and energy efficient designs (projected PUE of 1.18 and near zero water consumption), significantly lowering operating costs per megawatt and providing a long term net margin advantage in a market that increasingly prioritizes sustainability.
Want to see why such efficiency still supports a much higher price tag, even from today’s level? The narrative leans on rapid scaling, sharply improving margins, and a future earnings multiple more often associated with elite software names. Curious how those moving parts combine to justify that gap to fair value? Dive in to unpack the full set of assumptions driving this call.
Result: Fair Value of $43.70 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, sustained crypto exposure and aggressive, debt funded expansion could quickly erode margins if utilization lags expectations or key hyperscaler contracts weaken.
Find out about the key risks to this Applied Digital narrative.
Build Your Own Applied Digital Narrative
If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.
A great starting point for your Applied Digital research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
Looking for more investment ideas?
Before you move on, consider scanning fresh opportunities on Simply Wall Street so you are not relying on one story alone.
- Capitalize on underpriced quality by reviewing these 907 undervalued stocks based on cash flows that pair strong fundamentals with compelling valuation gaps.
- Explore secular growth trends by targeting innovation focused names across these 26 AI penny stocks that are shaping the next generation of intelligent technology.
- Strengthen your income strategy by screening these 15 dividend stocks with yields > 3% that can help support returns through changing market cycles.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com