From Nasdaq: 2025-05-28 09:14:00

Applied Digital Corporation’s APLD shares have surged 69.4% in the past month due to accelerating demand across hyperscale, colocation, and AI workloads. Despite a loss of 16 cents per share in Q1, APLD is investing heavily in data center infrastructure, with major capital expenditure planned by hyperscalers.

APLD’s stock outperformed the Finance sector and S&P 500 Index, reflecting investors’ confidence in its prospects. AI demand is outpacing supply, with tech giants like Microsoft and Meta investing heavily. APLD continues to expand its infrastructure to support High-Performance Computing, with plans to increase total capacity by 700 megawatts by 2027.

The recent financial deal secured by APLD will support its HPC infrastructure expansion. However, rising costs, seasonal power fluctuations, and technical challenges impacted revenues in the first quarter. APLD’s valuation is currently trading at a premium, suggesting caution for investors. Depreciation expenses and margin pressures are expected in the short term.

Despite positive fundamentals, APLD’s current valuation is high, leading to a Zacks Rank of #3 (Hold). Investors are advised to wait for a pullback before adding the stock to their portfolio. APLD’s growth potential is promising, but the company may face challenges in the short term due to ongoing investments and margin pressures.



Read more at Nasdaq: Applied Digital Rises 69% in a Month: Buy, Sell or Hold the Stock?