Is Applied Digital ($APLD) a Stock Potential to Double in 2026? Analysis & Forecast

TradingKey - Applied Digital (NASDAQ: APLD) stock was one of 2025’s wild rides: shares more than tripled over the course of the year—surging roughly 220%—despite enduring volatile swings since October. There is no way to go back in time and take advantage of this appreciation in value, so the focus of the investor is now on APLD's potential to continue growing into 2026, or whether the AI infrastructure trade starts to throw curveballs.

What is Applied Digital (NASDAQ: APLD)? 

The rapid growth of artificial intelligence (AI) has transitioned from the development of computer chips to a comprehensive build-up of AI infrastructure. Applied Digital (NASDAQ: APLD) has now established itself as one of the key players in this transition.

The initial phase of the current AI boom was the creation of computer chips for computing applications. Power consumption is now the next bottleneck to successful deployment of AI systems. The development and deployment of large language models, large-scale AI inference, self-driving cars and even humanoid robotics requires access to very large amounts of power on a continuous basis. Moreover, the thermal and electrical demands created by the use of these systems exceed those for which existing datacenters were originally designed. 

The emergence of APLD represents the potential solution to this problem. APLD builds, designs and operates custom-built data centers that are purpose-built for the deployment of next-generation computing resources. APLD's business model is essentially that of a landlord and operator of data centers for AI customers that have very high-density computing requirements.

Applied Digital operates on a strategic business model that functions like a tech-focused real estate investment trust (REIT) combined with a specialized operator. While their history as a Bitcoin miner informs their approach to securing large quantities of low-cost power from sites they originally scouted, Applied Digital builds the buildings that house many of the world's most powerful GPU clusters.

Instead of being built for a general-purpose use like cloud storage or internet bandwidth, the buildings that Applied Digital builds are specifically designed to hold the extreme amounts of heat and power needed by today’s technology, including LLM training, real-time AI inference, autonomous vehicle processing and humanoid robotics, etc.

Why APLD Tripled in 2025?

Capacity and Contract

According to Applied Digital, their major "proof point" is the North Dakota data center project. In October 2025, APLD announced the successful completion of the first 100 MW building at the Polaris Forge 1 campus on schedule and within budget, with plans to eventually expand to 400 MW. These megawatts are already contracted with CoreWeave in three distinct lease contracts for a total of $11 billion over 15 years, for which APLD will serve as a key infrastructure partner for CoreWeave's neocloud operations; thus, allowing CoreWeave's customers to lease both the latest GPUs from Nvidia, as well as to utilize their data storage, high-speed networking, and managed services capabilities.

There are no caps on the capacity leased to customers or campuses. APLD has additionally entered into a lease agreement for 15 years with an undisclosed investment-grade customer to lease up to 200 MW in North Dakota for a total of $5 Billion. This customer also has the right of first refusal on additional 800 MW at Polaris Forge 2. The company has outlined development costs up to approximately four GW with expected recurring annual revenues in the billions once fully developed and leased. CoreWeave currently has a contract for 400 MW, and it is likely that there are nine more contracts in addition to this contract for comparison that will become available if there is enough demand for them.

Speed of Execution

Execution is essential because the AI race is a race against time. According to APLD, they have assured their investors that the construction of Polaris Forge 1's building with 100 MW capacity is on track and well within the initial budget. Phase One is scheduled to be completed by the end of October and the end of November for Phase Two, which means that CoreWeave would have 100 MW available for its 400 MW deployment. APLD Chairman & CEO, Wes Cummins, believes the latest contract wins confirm the company's long-held belief that they represent the "modern-day picks & shovels of the intelligence era". Hyper-scale cloud providers are projected to spend an estimated $350 billion on AI infrastructure over the next year, and the company is focused on building strategic partnerships with the world's largest technology firms.

Peers are moving fast as well, and the context helps. Iren has approximately 3 gigawatts in its pipeline and signed a five-year, $9.7 billion deal with Microsoft for 200 megawatts; Cipher Mining has roughly 3.2 gigawatts in its pipeline and inked a 15-year, $5.5 billion contract with Amazon Web Services for 300 megawatts. Applied Digital's capacity, now at 4GW, puts it in first place on a current basis, but with more PPAs being signed with different technology companies, the long-term outlook for each provider could change quickly from here forward.

Shortcut to Cheap and Stable Power

Applied Digital has a very strategic angle in the way it builds. Previously, the Company started with Bitcoin mining, which resulted in having locations with cheap and stable sources of power electricity. Power electricity is precisely what prevents further growth of AI Data centers. APLD creates designs for the locations, as well as the cooling systems and delivery of power to support the high heat output and constant load of AI (computers and systems) applications. APLD will primarily create co-location spaces for customers such as CoreWeave that lease the space and power and provide their hardware. In addition, APLD will provide rentals to the clients that do not want to own their own servers.

Can Applied Digital Stock Double Again in 2026?

After demonstrating its ability to produce in 2025, the following year will provide an opportunity to demonstrate the ability to generate profits. There is a good chance the stock could double in value again; the catalyst for that happening will be due to Adaptive Digital's shift from a high margin operational phase from a fast-consuming build period.

Financials and Funding

Financially, APLD is in a land-grab phase financially as evidenced by the huge numbers APLD achieved in Fiscal Q2 of 2026 (Fiscal Year Ending November 30, 2025). In this period, revenue increased 250% year-over-year to $126.6 million, and is way above analysts' expectations. Even though the growth is exceptional, APLD's business model is still in a build-out phase where it makes significant Capital Expenditures (CAPEX). Presently, this means that APLD must spend a large amount of money in each new Data Center that it builds (for example, specialized cooling equipment, electric power substations, high-density building shells, etc.) before the Data Centers can begin generating revenue.

However, APLD has aggressively de-risked its capital needs through major strategic financing. APLD has secured an important financing agreement with Macquarie Asset Management. This is an agreement with Macquarie Asset Management that will provide up to $5 billion specifically for the company to develop the new 400 Megawatt Ellendale facility. Recent draws, including $337.5 million in early 2026, ensure the pipeline remains fully funded. APLD Additionally raised $160 million through a placement of shares with large institutional investors such as Nvidia, and they have also raised $2.35 billion through a private offering of senior secured notes that were used to complete the development of their Polaris Forge 1 and 2 campuses.

Unlike speculative developers, APLD is building against a $16 billion backlog. This significantly de-risks the buildout, as the revenue is "locked in" before the concrete is even dry.

Backed by Nvidia

Following NVDIA's announcement that APLD would be the company's enlisted “Preferred Cloud Partner” and invested in APLD, there were profound changes in how investors valued APLD. As a result of this purchase, APLD has emerged as a company focusing on "AI-centric" stocks, giving them a higher profile within the financial marketplace because of NVDIA's endorsement of APLD as their "Preferred Cloud Partner." Due to elevated levels of publicity surrounding APLD, interest levels have risen dramatically among institutional investors and other market participants. A result has been the willingness of the market to pay a greater price premium reflecting APLD's future growth opportunity, resulting in a greater valuation multiple and, hence, a greater stock price by 2026.

Improving Fundamentals

Despite experiencing net losses up until this point in time, the Company has now arrived at an important point in its evolution as a primary business. As shown by the results of the second quarter of FY2026, the Company can produce a positive adjusted EBITDA ($20.20 million) from their operational activities. This positive result is also a reflection of the growth of the Company's data centre capacity, which will support the APLD Business Model, as well as contracts covering approximately 600 Megawatts of data centre power.

As these new contracts produce more revenue to the business — mainly due to providing high margin recurring leases rather than lower margin one-off contracts — it remains uncertain whether APLD can grow at a similar rate to what occurred in 2026, and thus whether the stock price will continue to move upward. The timing of when the CAPEX associated with the new data centres results in significant lease revenues will ultimately determine if APLD's business model continues to be validated in 2026 and thus will result in the conversion of APLD's current net losses into increased shareholder value.

Should You Buy APLD Right Now?

All that said, the APLD stock price now reflects more than the current income statement. The stock traded at a mid-single-digit price-to-sales (P/S) ratio for a majority of the two years, however, APLD has risen to a P/S ratio of around 30; this conventional value appears to be that of hot software stocks rather than those of traditional operators of power and real property.

The issue here is that while the software company can justify 10-20x the revenue because of 80% gross margin – APLD only has an approximate 15% gross margin. This therefore would give APLD far less peak profit potential and inherently lower multiple.

A component of Applied Digital is leverage and dilution, which are part of APLD's financial future. APLD will likely be able to continue to borrow money at high interest rates and issue additional equity to fund the construction phase of APLD's data center business. What APLD has to balance is that if demand for AI decreases, then APLD could be in a situation where they have taken on too much debt and will find it more challenging to meet their obligations moving forward. Conversely, if new lease agreements are signed and the market continues to have a strong risk appetite, APLD's stock will continue moving forward. The path dependence is evident and valid; however, it does not automatically mean that 2026 will be a great year for APLD because there are several variables that have to be satisfied in between now and then.

Roll it up, and APLD is a levered bet on power as the next bottleneck in AI. At present, APLD continues to build its pipeline of customers who need power, as well as developing long-term leasing contracts worth billions of dollars, developing long-term leases, have a cash partner in Macquarie, and also customers looking for both wattage and GPU products. 

Applied Digital is also a very costly stock relative to other public companies based on market multiples, financing risk is continually increasing due to the possibility of an AI build slow down.

For investors tracking NASDAQ: APLD, the bull case hinges on more contracts like CoreWeave’s, steady execution at Polaris Forge, and a supportive risk backdrop; the bear case anchors on valuation, gross margin limits, and balance sheet strain. 

Regardless of your opinion on APLD, it is in the epicenter of the AI power buildout, and that fact is likely going to dominate the APLD stock price discussion in the year 2026.