Applied Digital Stock Analysis: 200% Yearly Gain Backed by Nvidia - Can APLD Stock Double by 2026?

What is Applied Digital Stock?

TradingKey - Data center infrastructure developer Rowan's potential funding round or full sale, valued at over $10 billion, has reignited market interest in the sector. Investment in data center infrastructure is surging amid the ongoing AI boom. Notably, Applied Digital has rallied 200% this year, yet analysts still consider the stock undervalued.

Applied Digital (NASDAQ: APLD) is a digital infrastructure provider offering services for AI and high-performance computing (HPC). The company secured its first round of funding in April 2021, marking its entry into the data center infrastructure space. At that time, APLD was known as Applied Blockchain, Inc., and solely provided data center hosting services for Ethereum and Bitcoin miners.

However, in September 2022, a shift in the Ethereum network's consensus mechanism eliminated the demand for cryptocurrency mining, prompting APLD to pivot its operations. The company began to venture into the AI and HPC sectors. In November 2022, the company officially changed its name to Applied Digital Corporation. Currently, AI and HPC remain the company's core business and primary growth engine. Additionally, Applied Digital offers cloud services.

Historical APLD Stock Price

April 2022 - Year-End: Amid Crypto Winter, IPO Drew Little Attention

apld debuted on Nasdaq on April 13, 2022, with its IPO priced at $5 per share. The company issued 8 million common shares, raising approximately $40 million, which was below its previously lowered offering range of $6-$8 per share. The firm had initially planned to offer 3.2 million shares at $16.54-$20.54 per share, aiming to raise $60 million. This pricing adjustment underscored cautious market sentiment towards the IPO.

Upon its debut, apld made little impact. On its first day of public trading, the stock closed below its offering price. By mid-2022, its share price fell below $1 and remained depressed throughout the year.

This downturn was primarily due to the Federal Reserve raising interest rates seven times in 2022, hiking rates by 425 basis points. This move diminished the appeal of high-growth, high-risk assets, pushing the entire capital market into a downtrend. As a crypto-related stock at the time, apld also faced the crypto market's severe winter. Specifically, the shift in Ethereum's consensus mechanism in September 2022 dealt a significant blow to apld, which primarily focused on Ethereum mining hosting.

Early 2023 - July: Pivot to AI and HPC, Showing Rebound

After officially rebranding and transforming at the end of 2022, the company finally saw a rebound in early 2023. The real turning point came on May 15, when apld announced the launch of specialized AI cloud services through its subsidiary, Sai Computing. The following day, it announced its first major customer, securing a 24-month contract worth up to $180 million, which drove a 25% surge in its stock price that week. This order validated apld's AI transformation capabilities, significantly boosting market confidence in its future growth potential, and propelled the stock to an all-time high of $11.62 in June.

July 2023 - June 2025: Trading Sideways

During this period, apld's share price largely traded below $10. This was mainly because the market had already digested previous positive news, and expectations for apld had shifted to scrutiny of its actual performance. However, construction of apld's new data centers lagged expectations, and significant investments led to widening losses for the company. Despite rapid revenue growth, its financial health remained a concern for the market. Concurrently, tech giants like Amazon and Microsoft were building their own AI infrastructure, and competitive pressure from these formidable rivals undoubtedly weighed on apld's stock.

June 2025 - Present: First CoreWeave Order, Stock Soars

In June 2025, apld announced it secured an order from CoreWeave, projected to generate approximately $7 billion in total revenue over a 15-year contract term. This order marked the beginning of apld's explosive stock growth. The substantial size of the order alleviated market concerns about future revenue streams. More importantly, CoreWeave is a leader in AI cloud services and is backed by Nvidia, affirming apld's data center infrastructure capabilities are world-class. apld began to be seen as a core player in the AI infrastructure sector.

In August, CoreWeave signed an additional agreement, increasing the total revenue over 15 years to $11 billion. Both orders provided significant upward momentum for apld's stock.

On October 9, apld's stock surged after the company reported better-than-expected Q1 fiscal 2026 results, with revenue up 84% year-over-year to $64.22 million and a smaller-than-anticipated loss. The stock jumped as much as 14% in after-hours trading that day, reaching an all-time high of $40.20 in mid-October. Shortly after the earnings release, apld announced a $5 billion leasing agreement with a hyperscale customer on October 22. Despite a decline in its stock price that day, apld's cumulative large orders and better-than-expected revenue performance led the market to view it as a potential hyperscale data center operator.

APLD Stock Price to Rise 200% by 2025 – What's the Basis?

1. Backed by Industry Giants

One key driver for Applied Digital's (APLD) stock surge in 2025 stems from significant endorsements, including major orders from CoreWeave and a strategic investment from Nvidia.

On September 5, 2024, APLD announced a $160 million private placement agreement with institutional investors, Nvidia, and real estate firm Related Companies. Public filings from late 2024 reveal that Nvidia holds approximately 7.72 million shares of APLD, representing about 3% of the company's outstanding stock. Applied Digital's CEO has since stated that the company has become Nvidia's preferred cloud partner.

While CoreWeave's orders signify industry recognition of APLD's operational capabilities, Nvidia's investment has brought about a fundamental shift in its valuation framework. In short, Nvidia's backing has propelled APLD to become a widely recognized AI-centric stock, and even an 'Nvidia play.' Consequently, the market is now willing to pay a higher premium for APLD's growth prospects, granting the company a higher valuation, which directly benefits its stock price.

2. Substantial Capital Infusion

Beyond the $160 million financing round in September 2024, which included Nvidia, APLD also announced a $2.35 billion offering of senior secured notes at the end of 2024. Furthermore, in January 2025, the company reached an agreement with Macquarie Asset Management.

Macquarie pledged up to $5 billion in investment specifically for the construction of APLD's 400-megawatt AI data center in Ellendale, designed to help the company fulfill its contract with CoreWeave on schedule.

This cumulative financing, totaling over $7 billion, has comprehensively addressed the company's urgent need for substantial capital to build out its large-scale data centers. This ensures APLD can dedicate its full attention and resources to research and development.

While financing rounds often trigger investor concerns about equity dilution or a company's financial health, APLD's recent capital raises have bucked this trend, with positive impacts far outweighing negative expectations. Primarily, the involvement of industry giants like Nvidia has significantly boosted APLD's market credibility and industry standing. Secondly, Macquarie's substantial $5 billion investment is not intended to cover APLD's losses, but rather to support its collaboration with CoreWeave and generate significant returns, indicating Macquarie's confidence in the company's revenue-generating capabilities. Furthermore, while APLD is a capital-intensive business, it operates with exceptional efficiency. Quarterly revenue growth has repeatedly hit 200% and even 300% since Q1 FY2025, underscoring APLD's robust earning potential.

3. Improving Fundamentals

Applied Digital's fundamentals have significantly improved since 2025. Although the company remains in a net loss position, its quarterly revenue growth exceeded 200% in both Q2 and Q3 of fiscal year 2025. As data center capacity expands, its core operations have consistently generated positive adjusted EBITDA, indicating that the core business is now contributing positive cash flow. Analysts forecast that the company could achieve profitability by fiscal year 2028.This foreseeable path to profitability reduces investment uncertainty and provides support for the stock price.

According to McKinsey's projections, data center demand is immense, with a global need for $6.7 trillion by 2030 to meet computing power requirements. However, constructing a data center from scratch typically takes at least five years. APLD currently has data centers under construction, including the aforementioned 400-megawatt AI data center in Ellendale, which is expected to be operational by 2027. This provides a significant competitive advantage.

How Much can APLD Stock Price Rise in 2026?

Analysts have significantly raised their price targets for Applied Digital (APLD) above $40 after the company reported stronger-than-expected earnings for October 2025. According to TradingKey's stock rating system, 10 analysts have an average target price of $43. As of the close on December 15, APPLD's share price was $22.98, implying an 87% upside potential.

However, this remains a general projection and should be adjusted based on specific developments. Investors should particularly monitor APLD profitability outlook, partnership progress, and revenue realization in the coming year.

Looking to 2026, a 150MW building at the 400MW AI data center in Ellendale is anticipated to be delivered by mid-year, while a portion of the 300MW data center in Harwood is expected to come online by year-end.Timely or better-than-expected delivery of these projects would further incentivize share price appreciation. Furthermore, investors should pay close attention to therevenue, earnings, and expenditure figures in the company's financial reports. Any data indicating strengthened revenue generation capability, improved capital efficiency, oran accelerated path to profitability would also serve as a catalyst for share price appreciation. Conversely, extended construction periods for data centers or a deterioration in financial performance could lead to a decline in the stock price.

Summary

Overall, apld operates in a sector with immense potential, driven by soaring computing power demand. With endorsements from industry giants such as CoreWeave and Nvidia, coupled with robust operational capabilities, apld is poised to become a leader among data center operators. However, risks should not be overlooked: the company is currently in a net loss position and continues to make substantial investments. Should significant delivery delays or other incidents occur, these could impact future collaborations with clients, potentially leading to hefty penalty fees or contract cancellations. Investors must therefore remain cautious and prioritize risk management.