Should You Sell Your APLD Stock Now?
If you own Applied Digital (APLD), one question keeps coming back. The company keeps signing enormous data center leases. Yet the shares sit well below their high of the past year. What is known is the contracted amount: $36 billion of long-term lease value. What is not known is how much of it ever reaches shareholders.
What Has Applied Digital Already Locked In?
A lease here is a long contract to house and power a customer’s computers. That same $20 billion signed in the fourth quarter comes from a single customer, representing more than half of the company’s total backlog. The customer pays for space that still has to be built. So the delivery record matters.
On that record, the company has met its delivery schedule on two consecutive milestones. Last fall it delivered its first 100 megawatts on schedule. Recently it delivered 75 megawatts more at the same campus, again on time. Both were at its Polaris Forge 1 campus.
Sales have grown an average of 145% a year over three years. By comparison, aggregate revenue across the S&P 500 grew at an annualized rate of 5.8%. Most of the capacity the company has sold is not yet in those sales.
What Does Applied Digital Still Have To Prove?
Revenue from its leased data center capacity mainly reflects only the first 100 megawatts, which were online during the quarter. The 75 megawatts delivered later were not online in that quarter. The company has 1.41 gigawatts under contract. So most of the rent has not started.
The price reflects rent that has not arrived. Investors pay 14.2 times the company’s sales. The S&P 500 trades at 3.1 times sales. Assuming the share price holds steady, that revenue multiple would compress as campuses come online and rent starts flowing.
Building costs money the company does not yet earn. Its operating margin over the past twelve months was minus 35%. The S&P 500 average is a positive 18.6%.
Management expects a $1 billion run rate in net operating income a year from now. That is rent left after the cost of running the sites. A year ago it set that goal for within five years, three years later than it now expects.
Management notes that the majority of this contracted revenue is concentrated with a highly rated, investment-grade cloud provider. While this provides credit support, it also highlights significant customer concentration risk.
How Much Could You Lose When The Market Turns?
In the 2022 inflation shock, this stock lost 78% from high to low. The S&P 500 lost 24%. The 2025 tariff shock took 65% off the stock. The index lost 19% that time.
Say you hold $10,000 of the stock. A repeat of the tariff shock fall would leave you about $3,500.
Debt is worth weighing alongside those falls. What the company owes equals 62% of its market value. For the S&P 500 the figure is 21%.
For this thesis to play out, three primary operational milestones remain critical: executing campus delivery schedules, securing utility interconnects in North Dakota, and translating base rent into sustained operating profits.
Management says power availability is the biggest limit on its growth. On the fiscal Q4 2026 call the company said it was in advanced talks with two customers. One expansion is about 100 megawatts. The other is about 150 megawatts.
If both are signed, contracted capacity rises to 1.66 gigawatts. The leases would add more than $6 billion of contracted revenue at existing rates. If they are not signed, the case still rests on the 1.41 gigawatts already contracted.
How To Act On APLD?
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