Is Applied Digital (APLD) The Best AI Infrastructure Stock to Buy According to Situational Awareness?

We just covered Leopold Aschenbrenner’s Situational Awareness Reveals Its 10 Under-The-Radar AI Stock Picks. Applied Digital (NASDAQ:APLD) ranks #3 (see Situational Awareness Top 5 Under-The-Radar AI Stock Picks).

Situational Awareness Stake Value: $319,978,118

Applied Digital (NASDAQ:APLD) is an AI infrastructure company that builds and leases large-scale data centers to some of the biggest technology companies in the world. Its moat lies in two hard-to-replicate advantages: secured access to grid-connected power and the equipment needed to build these facilities, both of which are in acute global shortage with lead times stretching to years.

Applied Digital (NASDAQ:APLD) recently signed a lease for Polaris Forge 3, its fourth data center campus, with a major US hyperscaler. Polaris Forge 3 is a massive facility to house and power the servers that run AI workloads. The deal runs 15 years, is worth $7.5 billion in base contracted revenue, and the tenant must pay regardless of whether it uses the capacity.

Applied Digital (NASDAQ:APLD) has also announced a fifth campus, Delta Forge 2, located in a new southern state, adding another 210 MW of capacity under a 15-year lease worth $5.2 billion in base revenue. All five campuses combined now represent $36 billion in contracted base-term revenue, or up to $86 billion if all renewal options are exercised, with roughly 70% backed by investment-grade hyperscalers.

Applied Digital (NASDAQ:APLD) is well-positioned to benefit from the roughly $700 billion in hyperscaler CapEx anticipated in 2027, because that spending is being driven by the rollout of Nvidia’s next-generation GPU architectures, which demand far more power than legacy data centers can supply. Applied Digital’s facilities are purpose-built for exactly these requirements.

The stock trades at 7x forward 2029 EV/sales, a meaningful discount to peers Equinix and Digital Realty, which trade at 9.35x and 9.53x, respectively.

Pixabay/Public Domain

While we acknowledge the risk and potential of APLD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APLD and that has 10,000% upside potential, check out our report about the cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy. 

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