How Far Can Applied Digital Stock Fall If The Business Keeps Growing?

Applied Digital (APLD) trades near $26, about 47% below its high of the past twelve months, after returning -36.3% over three months. Over twelve months, though, it is still up 55.6%. Nothing in the operation broke: it beat the quarter it reported in July 2026, and management says every project is on time and on budget. So how far can a stock like this fall?

So Why Is Applied Digital Down Despite Good Numbers?

The quarter was strong. Revenue for the three months to May 31, 2026 was $258.7 million, up 407% from a year earlier, and adjusted earnings came in positive where analysts had modeled a loss. On a reported basis the quarter still lost $111.6 million, after one-time and performance stock compensation.

The price of what it signed is another matter. Applied Digital signed three campuses in four months, among them Polaris Forge 3 and Delta Forge 2, all three to one investment-grade hyperscaler, taking contracted lease value to about $36 billion on contracts management says run for at least 15 years. The question that followed is whether the 810 megawatts in them went out at lower yields than peers get.

Management said its own rates would be right in the band, if not the middle to higher end of it, for deals of that scale, and that prices have increased since. It is now marketing another 1.7 gigawatts and expects that capacity to price higher.

Is The Business Behind Those Leases Getting Worse?

On its own numbers, no. Revenue over the trailing twelve months is up 229.2%, against a three-year average growth rate of 144.6%, so growth is speeding up. The operating margin is still negative at -35.1%, better than its three-year average of -40.7% though short of the -21.7% it has managed at best.

A year ago Applied Digital had one campus and $7 billion of contracted lease value. It now has five, and management names power and the supply chain as its limits on growth. It funds the build with debt, ending the quarter to July 27, 2026 with $5 billion of it against $4.2 billion of cash.

Applied Digital Has Fallen Three Times As Far As The Market

It has traded through 14 catalogued market shocks, falling an average of 46% peak to trough while the S&P 500 fell 16%. The stock’s 47% fall from the high is measured to today’s price, not to a trough. In the 2023 yield shock it fell 62% while the index fell 9.5%.

A 62% fall on a position worth a tenth of your portfolio takes about 6% off everything you own, and about 12% at a fifth. Those are peak-to-trough falls, measured differently from a three-month return.

Of the falls it has recovered from, the median wait from the low back to the prior high is about seven months, and the 2023 yield shock took about twelve.

The falls have been deep, and the typical wait back to the old high has been months. What none of that settles is whether a company with five campuses under construction falls the way the one-campus version did.

How Far Could Your Biggest Holding Fall?

The piece above put a number on how far this stock could fall, and a number like that matters most to whoever holds too much of one name. Concentration tends to arrive by accident rather than by decision. What your largest position would do to your net worth is exactly what the Trefis Wealth team computes, with the same rules-based systematic discipline that runs our High Quality Portfolio. Request a free vulnerability audit of your biggest positions.