What Are You Actually Buying In Applied Digital Stock?

What Are You Actually Buying In Applied Digital Stock?

Fri, September 4, 2026 at 3:06 AM GMT+3 3 min read

Applied Digital (APLD) has fallen 44.3% over the past three months while the S&P 500 returned 1.4%, and at about $24.90 the stock sits roughly 50% below its 52-week high. It still trades at 12.4 times sales against 3.2 for the S&P 500. Both are true at once, because the price has little to do with the business you can see today.

Why Does Applied Digital Still Look Expensive?

Start with what is switched on. Trailing twelve-month revenue was $0.6 billion, and by management's own account the fiscal Q4 2026 HPC data center financials primarily reflect only the initial 100 megawatts online at Polaris Forge 1, with 75 megawatts more delivered there since. Contracted critical IT load across the campuses is 1.41 gigawatts.

Set that against $36 billion of contracted long-term lease value, up from $7 billion a year earlier. That backlog is the asset you are paying for. The business underneath is scaling fast, and the income statement is still a construction site with only the first meters running.

Can Applied Digital Actually Build All Of It?

Management points at two constraints, when utility power arrives and its own supply chain, and has put a figure on the second: roughly 700 megawatts of critical IT load a year, against a 1.5 gigawatt build it has contracted to deliver inside a couple of years. By its own admission that exceeds the limit a little.

The record argues back. The first building at Polaris Forge 1 took about 24 months from the start of construction into service, and the second took under 12. Management says all of its construction projects are on time and on budget today.

The power that unlocks the next wave sits further out. The company's work with Base Electron covers roughly 1.2 gigawatts of natural gas-fired generation in the Dakotas, and that initial capacity arrives in 2029 and 2030.

What Happens To You If The Schedule Slips?

You fund the gap while it does, from the balance sheet rather than earnings. The operating margin is deeply negative at -35.1%, against 18.5% for the S&P 500, so the company as a whole still loses money on its operations. Debt runs at 71.6% of market value against 19.8% for the market, though cash is 16.0% of total assets against 6.6%.

There is a pricing question under the backlog. The three most recent leases, covering 810 megawatts, drew analyst questions about lower yields than peers, and management says its lease rates sit toward the higher end of the band for comparable deals and have increased since those discussions. Roughly $20 billion of the $36 billion came from those three, all signed with the same high investment-grade hyperscaler.

The next real read is whether the two expansion leases in negotiation, about 100 and 150 megawatts, land at the materially higher rates management expects.

So what are you buying? A large contracted revenue stream, a build program running a little ahead of the company's own stated capacity, and an income statement that will not settle which one wins for another year or two. After a 63.2% twelve-month return and a 44.3% three-month fall, this is not a quiet position.

If this stock's own numbers cannot settle the question, widen the field. Our five-factor stock scorecard ranks every stock on growth, profitability, stability, resilience, and valuation.

Nobody Should Underwrite A Construction Program Alone

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