Is APLD a good stock to buy? We came across a bullish thesis on Applied Digital Corporation on The Analyst’s Journal’s Substack by RA_Capital. In this article, we will summarize the bulls’ thesis on APLD. Applied Digital Corporation’s share was trading at $27.05 as of March 13th. APLD’s forward P/E was 526.32 according to Yahoo Finance.
Applied Digital Corporation designs, develops, and operates digital infrastructure solutions to high-performance computing (HPC) and artificial intelligence industries in North America. APLD represents a high-conviction investment opportunity in the rapidly growing AI and high-performance computing (HPC) infrastructure market. The company has successfully transitioned from cryptocurrency mining to becoming a developer and operator of purpose-built, next-generation data centers, with North Dakota locations offering low-cost power, renewable integration, and scalable land for mega-campus development.
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APLD benefits from long-term, investment-grade hyperscaler contracts totaling $16 billion over 15 years, providing exceptional revenue visibility and de-risking growth. The company operates three primary segments: Data Centre Hosting, which generates strong cash flow and operating margins from fully energized facilities serving crypto clients; HPC Hosting, including Polaris Forge 1 and 2 campuses with 600 MW contracted and expansion to 1.5+ GW underway; and a cloud business pending spin-out, allowing management to focus on core infrastructure.
Recent milestones, including Ready for Service completions, multi-billion-dollar lease agreements, and capital raises totaling $3.1 billion, strengthen its balance sheet and support rapid expansion. The market for AI data centers is projected to reach $165.73 billion by 2034, with APLD positioned to capture significant share through proprietary waterless cooling technology, modular scalable design, and strategic hyperscaler relationships.
While execution risks, customer concentration, competitive intensity, and negative cash flow during development remain, the company offers substantial upside through operating leverage as facilities reach full capacity, potential multiple expansion, and strategic optionality, including acquisitions or REIT conversion. Analysts project revenue of $400–500 million in FY2026, growing to $1.5–2.0 billion by FY2028, with significant free cash flow potential. APLD’s current valuation implies 50–100% upside over 12–24 months, making it a compelling BUY for growth-oriented investors seeking exposure to AI infrastructure expansion.
