Is APLD a good stock to buy? We came across a bullish thesis on Applied Digital Corporation on LongYield’s Substack. In this article, we will summarize the bulls’ thesis on APLD. Applied Digital Corporation’s share was trading at $45.20 as of June 22nd. APLD’s forward P/E was 526.32 according to Yahoo Finance.
Applied Digital Corporation designs, develops, and operates digital infrastructure solutions to high-performance computing (HPC) and artificial intelligence industries in North America. APLD is rapidly evolving from a former crypto-mining operator into one of North America’s fastest-growing AI infrastructure providers, with its fiscal Q3 2026 results demonstrating strong execution of its hyperscaler-driven strategy. Revenue surged 139% year over year to $126.6 million, reflecting accelerating demand for high-performance computing hosting as HPC Hosting became the largest segment at $71 million.
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Adjusted EBITDA of $44.1 million highlights improving underlying economics despite a GAAP net loss driven by heavy depreciation, interest expense, and stock-based compensation. A $2.15 billion financing and $2.7 billion debt stack, offset by $2.1 billion in cash, underpins an aggressive buildout strategy centered on hyperscaler contracts including a signed 200 MW lease.
The investment case is supported by rapid hyperscaler demand for GPU-dense liquid-cooled data centers, where Applied Digital’s early deployment of 100 MW liquid cooling infrastructure provides a structural advantage versus traditional colocation operators.
While leverage remains elevated with interest coverage near 1.2x, scaling utilization across Polaris Forge 2 and Delta Forge 1 could materially expand EBITDA and improve coverage ratios over the next several quarters. Overall, Applied Digital is positioned as a high-growth AI infrastructure compounder where near-term leverage risk is balanced by accelerating hyperscaler demand, long-duration contracted revenue visibility, and a rapidly scaling pipeline of GPU-dense campuses, suggesting meaningful upside potential as additional megawatts from Polaris Forge 2 and Delta Forge 1 come online and utilization ramps toward full capacity in the coming periods supported by structural AI compute shortages in North America over the medium term.
Previously, we covered a bullish thesis on Applied Digital Corporation (APLD) by DoU92 in December 2024, which highlighted infrastructure-led AI positioning, scalable HPC hosting, and undervaluation. APLD’s stock price has appreciated by approximately 389.39% since our coverage. LongYield’s Substack shares a similar view but emphasizes execution momentum, hyperscaler contracts, balance sheet expansion, and Q3 fiscal 2026 growth accelerating revenue visibility.
Applied Digital Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held APLD at the end of the first quarter which was 40 in the previous quarter. 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 this cheapest AI stock.
Disclosure: None.
