APLD Trades Near 52-Week High: Should You Buy, Sell or Hold the Stock?

Applied Digital APLD shares closed at $38.26 on Monday (Feb. 09), 9.5% below the 52-week high of $42.27 it hit on Jan. 28, 2026. APLD shares have jumped 172.7% in the past six months, outperforming the Zacks Finance sector's 9.3% increase and the Financial – Miscellaneous Services industry’s 23.4% decline. The stock has also far outpaced peers, with Riot Platforms' RIOT shares advancing 34.8% and Equinix's EQIX shares appreciating 10.4% over the same period.

The rally in APLD shares stems primarily from the company's success in securing substantial hyperscale data center leases that validate its business model transformation.

APLD Stock’s Performance

Image Source: Zacks Investment Research

APLD’s Contracted Revenue Pipeline Provides Visibility

APLD's long-term revenue outlook is underpinned by $16 billion in prospective lease revenues secured across 600 megawatts with investment-grade hyperscalers, including CoreWeave CRWV. The CoreWeave agreement encompasses 400 megawatts at Polaris Forge 1, representing $11 billion in committed revenue over 15 years. The first 100-megawatt building is currently operational and generating lease income. APLD reported $12 million in recognized lease revenues during the second quarter as CoreWeave's lease commenced partway through the quarter.

This marks the critical transition from pure development to recurring revenue generation. An additional 200-megawatt lease at Polaris Forge 2 with a separate investment-grade hyperscaler contributes $5 billion in prospective revenue. This demonstrates APLD's ability to replicate its contracted model across multiple campuses. APLD expects lease revenues to ramp substantially over the next 18 to 24 months as additional buildings achieve operational status through 2027.

The Zacks Consensus Estimate for APLD’s fiscal 2026 loss is pegged at 36 cents per share, widening by 6 cents over the past 30 days. The figure indicates an improvement of 55% from the loss reported in fiscal 2025.

Applied Digital Corporation Price and Consensus

Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote

APLD’s Balance Sheet Strength Enables Multi-Site Development

APLD concluded the second quarter with $2.3 billion in cash and cash equivalents against $2.6 billion in debt, providing substantial liquidity for capital-intensive expansion plans. The Macquarie Asset Management financing framework offers access to $4.1 billion in remaining preferred equity capacity, enabling large-scale project funding while APLD retains over 85% ownership at the site level. This structure limits equity dilution for existing shareholders. The company completed a $2.35 billion offering of 9.25% senior secured notes due 2030 during the quarter, with most debt maturing in 2030 and minimizing near-term refinancing risk.

APLD raised an additional $382.5 million after quarter end, further bolstering financial flexibility. The planned spinoff of Applied Digital Cloud into ChronoScale separates distinct business models with different capital requirements. The cloud platform generated over $60 million in trailing revenues on $313 million in assets, requiring less capital than data center development. APLD will retain over 80% ownership in ChronoScale post-spinoff, preserving strategic upside while allowing independent operations in the competitive GPU-as-a-service market.

APLD Faces Premium Valuation

APLD currently trades at a forward price-to-sales multiple of 22.94x, substantially above the sector average of 9.23x and the industry average of 2.82x. This represents a significant premium to peers Riot Platforms and Equinix, which trade at forward price-to-sales multiples of 7.95x and 8.30x, respectively. The elevated multiple reflects investor expectations for substantial revenue growth as leased capacity transitions to operational status over the next 18 to 24 months.

The premium valuation appears difficult to justify given the extended timeline for revenue conversion and ongoing profitability challenges. APLD reported a GAAP net loss of $31.2 million during the second quarter as the company remains in a capital-intensive development phase. Advanced pipeline discussions on 900 megawatts remain uncontracted, representing growth potential rather than certainty. The stock's robust surge over the past six months has priced in significant future growth expectations, leaving limited upside from current levels.

APLD Stock Trades at a Premium

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Conclusion

APLD demonstrates strong operational execution, with the first phase of Polaris Forge 1 now generating revenues and securing contracts with hyperscalers, including CoreWeave, establishing a foundation for future growth. The company's substantial liquidity position and access to preferred equity financing enable continued expansion across multiple sites. However, the stock trades at a significant premium to peers Riot Platforms and Equinix despite remaining in a capital-intensive development phase.

APLD currently has a Zacks Rank #3 (Hold), suggesting that investors should wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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