Remember when your friend told you about that “sure thing” crypto investment that promptly crashed 90%? Well, Applied Digital (NASDAQ: APLD) is basically the opposite of that story – except this time, the gains are real and the business actually makes sense.
This data center darling just popped another 14% on Friday, bringing its year-to-date gains to a frankly ridiculous 255%. And before you ask – no, this isn’t some meme stock fueled by Reddit hype and dreams. This is actual business happening.
Show Me the Money
Applied Digital just locked in a sweet financing deal with Macquarie Group – you know, those Australian investment banking folks who definitely know a thing or two about making money. We’re talking about a $100 million initial draw from a larger loan facility, specifically earmarked for building more AI data centers.
Translation: They’re getting paid to build the digital infrastructure that powers our AI-obsessed future. It’s like being the guy who sold pickaxes during the gold rush, except the gold rush is artificial intelligence and the pickaxes are massive server farms.
CEO Wes Cummins basically said they’re positioning themselves to “move quickly on high-quality sites” – which in corporate speak means “we’re going to grab the best real estate before everyone else figures out how lucrative this is.”
The Numbers Don’t Lie
Here’s where it gets interesting. Applied Digital already has two data center campuses in North Dakota (because apparently that’s where the magic happens). One is leased to CoreWeave, and another is getting a “major hyperscaler” – think Amazon, Microsoft, or Google – moving in early 2026.
The company’s revenue jumped 84% year-over-year to $64 million last quarter. But here’s the kicker: they’re sitting on $11 billion in contract value from their CoreWeave lease alone, plus another $5 billion from that mystery hyperscaler. That’s not Monopoly money – that’s real, contracted revenue stretching over 15 years.
CFO Saidal Mohmand dropped this gem on their earnings call: they’re targeting $1 billion in net operating income within five years. For context, that’s the kind of cash flow that makes investors do happy dances.
Wall Street’s Love Affair
All 12 analysts covering this stock rate it a “buy” with a median price target of $40.50. That suggests another 49% upside from current levels. Even after a 255% run-up, the smart money thinks there’s more room to grow.
Sure, they posted a $28 million loss last quarter, but it was 275% better than the year before. Plus, with a forward P/E of 19 based on next year’s earnings projections, profitability is basically around the corner.
The Bottom Line
Applied Digital is essentially betting that our AI future needs a lot more computing power, and they’re building the infrastructure to deliver it. With major tech companies scrambling for data center capacity and Applied Digital already locking in multi-billion dollar contracts, this might be one of those rare times when the hype actually matches the fundamentals.
Just remember – past performance doesn’t guarantee future results, but sometimes the stars align and you find a company riding the right wave at exactly the right time.