Quick Read
- APLD stock rose over 70% in two weeks after a major CoreWeave leasing deal.
- CEO Wes Cummins sold 400,000 shares, triggering early September volatility.
- Applied Digital’s valuation remains high, with a 13.5x price-to-sales ratio.
- Polaris Forge 2, a $3 billion data center, is set for 2027 completion.
- The company is in talks with a major U.S. hyperscaler for further expansion.
APLD Stock Climbs 70% in a Fortnight: The Forces Behind the Rally
In the fast-moving world of technology stocks, few stories have captured investor imagination lately like the meteoric rise of Applied Digital (NASDAQ: APLD). Over the past two weeks, APLD shares have staged a powerful comeback, surging by more than 70% and leaving even seasoned market watchers scrambling to make sense of the drama unfolding across trading floors. But behind every headline-grabbing rally lies a deeper narrative—a blend of bold corporate moves, shifting market winds, and the relentless search for the next big thing in tech infrastructure.
Insider Selling and Sudden Swings: A Rollercoaster Start to September
Not long ago, the mood around Applied Digital was anything but euphoric. Early September saw the company’s stock tumble by 25% in less than two weeks, falling to $13.16—a sharp reversal from the record highs notched in August. Investor anxiety spiked when news broke that CEO Wes Cummins had sold 400,000 shares for over $6 million at $15.26 per share. The timing of this insider sale, overlapping with Alibaba’s announcement of a new AI processor, amplified fears that Applied Digital might be losing its competitive edge just as the artificial intelligence (AI) infrastructure market was heating up.
The volatility was palpable. According to FX Leaders, the company has endured 95 trading sessions in the past year where the stock moved more than 5%—a testament to just how reactive investors have become to any news, whether good or bad.
The CoreWeave Deal: A Turning Point in Market Sentiment
What changed the tide? The answer lies in a single, high-profile announcement. Applied Digital revealed a new leasing agreement with CoreWeave, a major cloud provider, sending a jolt of optimism through the investor community. This deal, which boosted the company’s projected contracted revenue to approximately $11 billion, marked a decisive pivot toward high-performance computing for AI. The stock responded in kind: a 37% rally in just one week, capped by a 10-day winning streak that added nearly $2 billion to Applied Digital’s market capitalization. As Yahoo Finance reports, the company’s total contracted data center capacity now stands at 400 megawatts—a clear signal that Applied Digital is doubling down on powering the next generation of AI applications.
This momentum placed APLD in the company of industry heavyweights, as Nvidia reportedly included Applied Digital among its portfolio of AI infrastructure investments. The broader sector has also been buoyed by headline deals, such as Oracle’s partnership with OpenAI and Super Micro Computer’s launch of Nvidia-powered Blackwell systems, highlighting a market-wide surge in demand for AI infrastructure.
Valuation Concerns and the Quest for Sustainable Growth
Yet, as with any tech rally, the question of sustainability looms large. Applied Digital’s price-to-sales ratio has soared to 13.5x—far above the sector average of 3.5x—raising eyebrows among analysts and prompting warnings about potential profit-taking. The company’s second-quarter revenue reached $38.01 million, up 41.3% year-over-year but still falling short of Wall Street’s lofty expectations.
Despite these headwinds, Applied Digital has reassured investors with its latest earnings report: a loss per share of just $0.03, dramatically beating estimates that predicted a $0.14 loss. Improved cost controls and operational efficiencies have contributed to this outperformance, restoring some confidence in the company’s ability to navigate market turbulence.
Big Bets on the Future: The $3 Billion Polaris Forge 2 Project
Looking beyond quarterly numbers, Applied Digital is betting big on the future. The company recently announced plans for Polaris Forge 2, a $3 billion data center project in North Dakota. Spanning 900 acres and boasting a projected 280 megawatts of power capacity, this facility is expected to employ over 200 people and serve as a lynchpin for Applied Digital’s long-term growth. Scheduled for completion in 2027, Polaris Forge 2 is a clear declaration of intent: Applied Digital aims to stand toe-to-toe with the giants of the AI infrastructure world, including Core Scientific and TeraWulf.
The company is also reportedly in talks with a major U.S. hyperscaler—a potential partnership that could further solidify its role in the rapidly evolving data center ecosystem. As TipRanks points out, the broader tech and energy sectors are racing to meet the explosive electricity demands driven by AI data centers, with nuclear energy and modular reactors now entering the conversation as possible solutions.
AI Infrastructure: A Sector at the Center of Global Transformation
Applied Digital’s rise is emblematic of a larger trend: the global arms race to build infrastructure capable of supporting the next wave of AI breakthroughs. Demand for electricity and data processing is soaring, with industry analysts predicting trillions in investment over the coming decades. Nuclear power, particularly small modular reactors, is being eyed as a critical component in meeting this need, potentially tripling its share of U.S. electricity generation within the next decade.
For investors, the stakes are high. Applied Digital is up 196% since the start of the year, setting new 52-week highs above $23 per share. For those who bought in early—say, $1,000 five years ago—the returns have been nothing short of astonishing, now valued at over $350,000. But with great returns come great risks: as the sector becomes more crowded and valuations remain elevated, the road ahead will likely feature more volatility and fierce competition.
Assessment: The story of Applied Digital’s recent surge is a vivid illustration of both the promise and the peril in the AI infrastructure race. Ambitious deals and visionary projects have reignited investor enthusiasm, but the company’s sky-high valuation and exposure to sector-wide volatility serve as reminders that rapid growth in tech is rarely linear or risk-free. Ultimately, APLD’s future will hinge on its ability to turn bold plans into sustainable, profitable reality—a challenge shared by every contender in this high-stakes arena.