APLD: Understanding Applied Digital Corporation
A key player in Artificial Intelligence and Supercomputing
Analysis Summary
Applied Digital Corporation (APLD) builds infrastructure for future technologies like Artificial Intelligence (AI) and supercomputers. Recently, the company secured significant funding of $2.15 billion to expand its data centers, especially for a project with Oracle. It has also created a new company, ChronoScale Corporation, for its cloud activities.
APLD stock is known for moving a lot (it's "volatile," with a Beta of 7.34). Many investors are betting on its decline (over 31% of shares are "sold short"). Despite strong sales growth, the company is not yet profitable. Recently, NVIDIA sold all its APLD shares, which might have pushed the stock price down. APLD's advantage is its strong position in the fast-growing AI markets. But be aware, its current price is high, and it has increasing debt.
The Company: Who is Applied Digital?
Applied Digital Corporation designs, develops, and manages digital infrastructure for the needs of supercomputers (HPC) and artificial intelligence (AI) in North America. It also offers services for cryptocurrency miners and high-performance computing solutions for AI and machine learning tasks.
- What it does: Information Technology Services (ITS)
- Its field: Technology
- Key topics: AI, Cloud Computing, Data Centers, Semiconductors, Blockchain (crypto technology).
- Employees: 205 people
- Where it's located: Dallas, Texas, United States
- Website: applieddigital.com
Latest Important News
March 2, 2026: New $2.15 Billion Funding
Applied Digital announced its intention to borrow $2.15 billion (as "senior secured notes") to fund the expansion of its large data center "Polaris Forge 2 AI Factory." This center is leased by Oracle. This shows that APLD is investing heavily to meet the growing demands in AI and supercomputing.
February 17, 2026: A new company: ChronoScale Corporation
APLD made an agreement with Ekso Bionics Holdings, Inc. to create a new company called ChronoScale Corporation. This new entity will primarily focus on APLD's "cloud" services and will be publicly traded. APLD will hold approximately 97% of this new company.
March 3, 2026: NVIDIA sells its shares in APLD
NVIDIA, an AI giant, sold all its shares in APLD. This represented 7,716,050 shares. Even though NVIDIA made a good profit, this sale might have added downward pressure on APLD's stock price. NVIDIA's investment decisions are often closely watched.
Key Financial Figures of the Company
Applied Digital is in a capital-intensive sector, which is reflected in its finances. The company has significantly increased its sales, but it is not yet profitable.
Some Important Figures
| Figure | Value |
|---|---|
| Market Value | $7.43 billion |
| Total Sales (12 months) | $263.99 million |
| Sales Growth | 250.1% (very strong) |
| Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) | $21.41 million |
| Gross Margin (profit on sales) | 19.62% |
| Operating Margin (profit after operating expenses) | -24.45% (negative) |
| Net Margin (final profit) | -47.35% (negative) |
| Cash on Hand | $1.91 billion |
| Total Debt | $2.61 billion |
| Beta (volatility measure) | 7.34 (very high) |
| Stock Price / Book Value | 5.12x (high) |
| Average Target Price (by analysts) | $45.27 |
| Analyst Recommendation | Strong Buy |
In simple terms: A very high "Beta" figure (7.34) means that APLD stock moves much more strongly than the rest of the market. Its sales have exploded (+250.1%), showing rapid development in promising areas. But beware, it is not yet profitable (negative margins). It has a lot of cash, but also a lot of debt ($2.61 billion), especially with the new funding. Analysts believe the stock will rise sharply ("Strong Buy" with a target of $45.27), showing their belief in its future, despite the risks and current unprofitability. The 5.12x "Price/Book Value" ratio indicates that the market expects strong future growth to justify this price.
Chart Analysis: How does the stock move?
Key Chart Indicators
| Indicator | Value | What it means |
|---|---|---|
| RSI (14 days) | 40.39 | Quite stable, but not far from an "oversold" zone |
| MACD | -1.52 (Line), -0.71 (Signal) | Confirms the current downward trend |
| Exponential Moving Average (EMA) 20 days | 31.57 | Short-term resistance zone (price struggles to move above) |
| EMA 50 days | 31.76 | Medium-term resistance zone |
| EMA 200 days | 24.08 | Long-term support zone (price could rebound here) |
| ATR (Volatility measure) | 2.73 | The stock moves a lot each day |
In simple terms: APLD stock is at $26.57. It is below its moving averages (EMA 20 and 50 days), which shows that sellers are stronger in the short and medium term. The 200-day EMA at $24.08 could be an important level where the stock could stop falling and rebound. The RSI is neutral, but if it drops further (below 30), the stock could be "oversold" and ready to bounce. The MACD confirms the current decline. The high ATR tells us the stock is very volatile, so be careful!
Important Levels: Where can the price stop or rebound?
| Type | Level | Strength |
|---|---|---|
| Key Support (price can rebound) | $24.08 (200-day EMA) | Very Strong |
| Minor Support | $22.50 (Historical) | Medium |
| Key Resistance (price can encounter difficulty) | $31.57 (20-day EMA) | Strong |
| Major Resistance | $38.00 (Historical) | Very Strong |
Volume Analysis
The "Point of Control" (POC) of the volume profile is at $10.38, well below the current price. This means most shares were traded at much lower prices. The Value Area extends from $2.09 to $37.71. Currently, there is a negative imbalance (-12.97%) and a "transitional" Wyckoff phase, which could signal a change in direction or a period of uncertainty.
What others think (and big investors)
What's being said on social media (StockTwits)
On StockTwits, the general mood is rather neutral to positive (0.347). There are about 30 recent messages. People are divided: some see dips as opportunities to buy for the future, others worry about the lack of buyers. But many are looking for entry points despite the recent decline.
Shares held by management and large institutions
- Large institutions: 67.92% of shares (they hold a lot of shares)
- Insiders (Management): 13.31% of shares (they are highly involved)
- Insider activity: No significant buys or sells recently.
"Short selling" (Short Interest) and the cost to borrow the stock
- Shares "sold short": 31.25% of available shares (that's HUGE!)
- Short ratio: 2.46 days (it would take about 2.46 days to buy back all shorted shares)
- Cost to borrow the stock (CTB): 0.31% (this is low, but it has been much higher before)
The fact that over 31% of available shares are "sold short" shows that many investors believe the price will fall. This can cause very violent price movements: if the price rises quickly, "shorters" (those who sold short) have to buy back their shares in a hurry, which pushes the price up even further (this is a "short squeeze"). The current low cost to borrow the stock (0.31%) may mean that this "short squeeze" risk is not seen as immediate, or that fewer people want to borrow the stock. But historically, this cost has been much higher!
How to Invest: An Investment Idea
The Idea: Buy the stock if it rebounds on a key level
APLD is at the center of AI and supercomputing, fast-growing markets. Its current price already reflects some of this promising future. Recent news (Oracle funding, ChronoScale) are good long-term signals. However, NVIDIA's sale and current pressure on the price can create a good opportunity to buy if the stock rebounds on an important support level (the 200-day EMA). This is a somewhat "contrarian" bet that can yield significant returns if the idea proves correct.
When to buy? (Entry Zone)
Zone: $23.50 - $24.50
This level corresponds to the 200-day EMA ($24.08) and a past support. It's a good base for the price to rebound. There's also a "value area low" in the volume profile if the price continues to fall.
When to sell if it doesn't work? (Stop Loss)
Level: Below $22.50
If the price clearly drops below this level (below the 200-day EMA), it means our rebound idea is wrong and the stock could fall further.
First selling target (TP1)
Level: $29.00 - $30.00
This is the level where the stock was before falling, and also a resistance (50-day EMA). It's a realistic target for an initial gain.
Second selling target (TP2)
Level: $35.00 - $36.00
These are the high levels the stock reached before its correction, and an important resistance according to volume analysis. This allows for a higher gain compared to the risk taken.
What could confirm the purchase (Bullish Signals)
- RSI rebounds after falling below 30 ("oversold" zone).
- MACD makes a "bullish crossover" (MACD line crosses above its signal line).
- Buying volume increases when the price tests support.
- Good news on the company's AI/supercomputing projects.
What would invalidate the idea (Bearish Signals)
- Price clearly breaks the 200-day EMA with high volume.
- Major institutions change their minds, or there is bad news.
- The company's financial situation worsens (liquidity, debt perception).
- Shorters continue to sell aggressively.
When to act and how much to buy?
Horizon: Short to medium term (for a "swing trade").
What can move the price: Progress in the Oracle project, clarifications on ChronoScale, quarterly results. The possibility of a "short squeeze" (shorters buying back in panic) is a major potential driver.
Quantity: The stock is very volatile, so it is advisable to invest only a small portion of your money (a low percentage of the portfolio).
Staggered entry: Consider buying gradually in the entry zone to average the price and better manage price movements.
Attention: Important Information
This analysis is for informational purposes only and should not be taken as investment advice. Financial markets are risky and you can lose money. Each investor must do their own research and seek professional advice before making decisions.
The information in this analysis comes from public data available at the time of writing. Market Watch is not responsible for errors or omissions, or for investment decisions made based on this information.